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June 27, 2021

 Have taken some profits



Soybeans have dropped about $3.00 since their Mid-May high.
Even so, the "pros" are STILL talking about Beans going higher...My own opinion is that we're a little over half way to where we're going on the downside.

WE TOOK SOME PROFITS AT FRIDAY’S 30-40 CENT DEAD-LOW-CLOSE BUT STILL REMAIN SHORT...I suspect we won't be in this trade much longer timewise...that the crash lower will continue to be quite fast and quite big…and if it does develop quickly, we will be taking our money and walking away toward several other big trades that I believe are just getting started…


According to every analyst I have seen, this is NOT supposed to be happening, but Corn has dropped $1.25 (20%) in just the last 10 trading days…

 Now Shorting Soybean Oil

Actually, this is where I am establishing any immediately new positions we take…Soybeans are broken down into two products: Soybean Meal, which serves as animal feed, and Soybean Oil, which is for human consumption…and SOYBEAN OIL HAS BEEN THE MAJOR FACTOR IN TAKING SOYBEANS HIGHER. The bull market in “edible oils” has been massively hyped as a worldwide shortage, and as can be observed on the charts following, Soybean Oil has therefore been going up in rocket-like fashion. BUT, similar to what we’ve seen in Lumber and Hogs, as two recent examples (charts following), I BELIEVE SOYBEAN OIL HAS DEFINITIVELY TOPPED, AND THAT THE DELCINE (ALREADY UNDERWAY) WILL BE MASSIVE, AND RELATIVELY STRAIGHT DOWN…and as it is the nature of the beast, I WOULD NOT BE SURPRISED TO SEE IT GIVE BACK VIRTUALLY THE ENTIRETY OF ITS BULL MOVE…that even when Soybeans find some level at which they stabilize, the Soybean Oil will continue to fall.

Here two markets that I think represent what we are also about to see in Soybean Oil…


And no, just because it happened in Lumber, and appears to be doing the same in Hogs, does NOT mean that this equally stratospheric Soybean Oil market will do the same…but I AM making the trade knowing that this IS a possibility.


The long term picture…

I would also reiterate my previously stated belief that we have now entered a several year bear market for Corn, Wheat and Soybeans…and would advise farmers to be marketing both their 2021 and 2022 crops at current levels…and NOT to be thinking, “Ok. I missed my chance, but boy, if this stuff just gets back up to $____’s, I’m going to sell the heck out of everything I have.” That ain’t happening. EVERYBODY out there believed all the nonsense from analysts about running out of Corn and Beans this summer, and then recently believed that the dry weather, mostly in North Dakota (???) of all places, was relevant to our countrywide production of Corn and Soybean crops…and as a consequence, relatively NOBODY did any real marketing…meaning that there are billions of bushels out there STILL waiting to be sold…billions of bushels that are OVERHANGING the market…and my two cents is that there is no way that any significant rally can therefore develop from here…By my rough estimate, bull markets in grains run for about 12-18 months, then end with a flurry (as we’ve seen here), which is followed by PLENTY of production for several years that takes the market down for at least several growing seasons…or maybe two to three years…I don’t mean the markets just go down, down, down…There are both bullish and bearish phases that take place, but the overall outcome is just steadily lower.


With Corn collapsing, and the USA economy reopening…especially regarding restaurants and major outdoor events…and SUMMER cookouts, I might be dead wrong but I THINK THE CATTLE MARKET JUST LOOKS AND FEELS INCREDIBLY BULLISH…Friday’s 2.10 cent higher close was the highest close in almost 3 months…and more than ever, I believe that the move I’ve been looking for IS about to happen. FEEDERS HAVE BEEN SIDEWAYS FOREVER…AND I THINK THAT IS IMMEDIATELY ABOUT TO CHANGE…Again, this just my opinion, but I AM LOOKING FOR AN ESSENTIALLY NON-STOP STRAIGHT UP MOVE FROM HERE…and yes, pretty much the way I have drawn in the possibility on the chart below. Just the nature of the beast guy


As I wrote last week, Cotton looks like a classic bull market chart…After making a steady 35-40 cent move higher since early last year, four months ago it entered a wide-swinging consolidation…that I believe is either signaling a top…or representing a bull market normal pause (after a long move). In plain English, 86 cent Cotton does not even come close to comparing with $17 Soybeans, or $7 Corn, $1.25 Hogs, or $5.00 Copper, or $1700 Lumber, etc…And simply stated, with acreage, I believe, absolutely being lost to Corn and Soybeans…worldwide…and the Reopening of the World Economy…I DO THINK COTTON IS ABOUT TO ADD ANOTHER 30-40 CENTS ON THE UPSIDE FROM HERE.



GIVE me a call. A lot of BIG stuff has been happening…and I don’t expect that to change any time soon...So if you can write the check, I’d say DON’T just sit there and watch.





All option prices in this newsletter include all fees and commissions. All charts, unless otherwise noted, are by Aspen Graphics and CRB.

The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Soybeans, Soybean Oil, Corn, Cattle, Cotton

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