There are two newsletters here that went out today...One covering Corn, Soybeans and Wheat...And a second on Cotton (if you scroll down past the first)

July 13, 2021

 I repeat: Bear Markets in Corn, Soybeans and Wheat

Okay...So ALL we have heard FOR MONTHS on end is how we might “run out” of Corn, Wheat and Soybeans this summer, with the inference being that if you are an end user in any of them, you’d damn well better get your buying done ahead of time because you “might not be able to get any” come July or August…As an example, just imagine what it would be like if you were the feed buyer for a giant poultry operation, and on July 1^st you had to tell your bosses that the plant had to be shut down because you hadn’t bought feed (Corn or Soybean Meal perhaps) for July and August…and “now can’t get it anywhere?” My point is, when the hype has loudly been about “running out,” what DOES happen is that every possible buyer on the planet DOES go out and buy the hell out of whatever they need…ahead of time…which DOES provide that last bullish surge in a market (see the month of APRIL on all three charts following), that in itself inspires even MORE bullish talk…thus attracting hordes of late coming speculative buyers who are victims of the age old futures trap of “Who’s the last fool?”, that is, people who, after WATCHING a year-long rise, FINALLY decide to buy Soybeans at $17…thinking $20 is almost a certainty.

And then? What happens when you reach the point where all the actual end users HAVE BOUGHT? What happens when you actually run out of REAL buyers and the market is loaded with those late arriving speculators? Same old, same old story…Even as all the analysts, and all the farmers, and all the traders parrot each other in unanimously citing all the “bullish fundamentals,” you do reach the point where there really are NO real buyers left. And then…? Well, THERE IS THEN NO PLACE TO GO BUT DOWN… where the market first stalls out (which has already happened I think)…and then FALLS APART as all of those late, late buyers start losing money…and SELLING…which is exactly and immediately where I think we are today.

To summarize:

With all this unending bullish, bullish rhetoric everywhere, IT IS MY VERY FIRM CONVICTION THAT THERE CANNOT POSSI8LY BE ANYONE LEFT WHO USES ANY OF THESE CROPS THAT HAS NOT ALREADY BOUGHT WHATEVER THEY NEED FOR, MINIMALLY, THE NEXT FEW MONTHS…and so yeah, all we now have are three markets that are jam packed with speculators who are long…and hoping to get rich on the big rally that they think MUST be coming...And they are all about to lose their you-know-whats.

I cannot count the times I have seen this script during the past four decades…Where the whole trading world has bought LAST YEAR’S STORY…and bullish traders (and yes, “expert analysts”) just get creamed as they buy, and buy, and buy what is actually a massive bear market.

I don’t know how far down they’re going but I definitely think it’s a LONG way from here…Corn, Wheat and Soybeans ALL look like they are about to roll off a cliff…and one more time, JUST GO STRAIGHT DOWN.

If there IS a big shortage, why are all three of these markets more or less on their LOWS for the past 2-3 months? Why aren’t we zooming higher if the potential for “running out” is actually there?

My answer…Because we are now in bear markets in all three.

So let’s get real…ALL I hear from analysts and talking heads regarding Corn, Soybeans and Wheat is “tight stocks”, “weather”(maybe) and “bull market,” but everything I SEE suggests quite the opposite. OF COURSE, if the Midwest burns up,  all three of these contracts would probably rally (temporarily), but that’s the same bullish battle cry we get every year…and it usually doesn’t happen…And while it might be white hot in Oregon and Canada (which WILL change), Oregon is NOT the Midwest, where the weather has been fairly ideal and most likely will continue to be “normal” enough to produce bumper crops (which is why they are planted there)…So yeah, I DO THINK ALL THREE MARKETS ABOVE WILL DO SOMETHING LIKE I HAVE INDICATED ON THE CHARTS. These are bear markets guys. Get short. Don’t just sit there and watch them go down…And if you are a farmer, my recommendation is to get these crops SOLD. The bull is over.

And so we’ve started this week with rallies that I’m sure got EVERYBODY excited and thinking, “Oh boy. They’re all going up again. BUY NOW before they run away!” But take a good look at what yesterday and today represent in the big picture and you’ll note that THE RALLIES LOOK LIKE NOTHING…just like typical 1-2 day jumps that suck in the masses (again) before the COLLAPSE lower resumes…And don’t kid yourself, especially if you are a farmer: For Corn to be $1.25 off its highs, and Beans down $2-$3, and Wheat down $1.50 are NOT what you would expect to see in a bull market.

Here are my recommendations at current levels…

And Yes, I absolutely DO think we are headed for the low $4.00 area in Corn…and $10.50…I don’t ever just throw stuff out there just for the sake of attracting anyone’s interest.

I am also short Wheat but in the interest of focus, am going to stick with Corn and Soybeans here.

My very strong opinion, though it might be wrong, is that both of these moves are UNDERWAY NOW…and as I keep writing, if you think I am making sense, and have the capital to risk, DON’T just sit there and watch.

Text, Call, Email…Whatever…Just get in touch with me.

Thanks for reading.

Bill

770-425-7241

866-578-1001

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: Corn, Soybeans

July 13, 2021

We continue to BUY COTTON

Whether it’s in Texas, China, India or Pakistan, or wherever, when it’s time to make a decision regarding what to plant next…in the Northern Hemisphere or the Southern…I can only imagine that Cotton is losing, and will be losing, potentially quite significant acreage to Corn or Soybeans in every country where it is planted.

I think the 50 year comparison below…of where Soybean and Corn prices are relative to Cotton…are about all you need to understand why I think the Cotton charts, both 2021 and new crop 2022, LOOK SO BULLISH TO ME.

I THINK COTTON IS SET UP TO BE THE NEXT BIG SHORTAGE STORY…Aside from increasing consumer demand for everything as the US and Global Economies accelerate out of the pandemic, and I know it’s not the whole ball of wax, but all of the building, both residential and commerical, that is ramping up everywhere, DOES mean more demand for Cotton.

I’m not sure where Cotton is headed but I think it is a LONG way from where it is today…

And next year’s crop? That doesn’t go in the ground until next spring?

Right here, right now, I am still using the Sept options based on the December contract...I think this is READY to go...and see this option as dirt cheap relative to what I believe can happen here. As always, I might be dead wrong, but plain and simple, this just looks imminently explosive to me.

Two ways to go…Using the 2 & 1…

Thanks,

Bill

770-425-7241

866-578-1001

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: Cotton