July 13, 2023

Classic Buy Signal?

“Bearish” USDA report in Soybeans

…followed by New 4 Month Highs

One important aspect of trading is being able to realize when the odds heavily favor a BIG move taking place, one way or the other in a specific market.

My opinion: This is immediately the case in Soybeans…that we are about to see something like $3.00 up or $3.00 down ($3.00 = $15,000 per futures contract) before the current September contract goes off the board… And all things considered, my bet is 100% on the upside.

With the crop already the most poorly rated in a decade, and the weather across the USA (and elsewhere) about as funky as I can ever remember…and seemingly everybody in the analytic community NOW harping on “poor demand,” I just have to think that the VERY bullish look on the chart below IS about one good day away (literally) from erupting on the upside…ESPECIALLY after yesterday’s purportedly bearish USDA report slammed the market for almost 50 cents high to low…but today reversed back up, closing 40 cents higher, representing the HIGHEST CLOSE IN OVER 4 MONTHS. Nothing is absolute in this business, but one of the most reliable signals I know is that when a market totally REJECTS bearish news, you need to be going with the bullish side of that market.

Until this thing presents a failure (as we absolutely have had in Corn) I remain extremely bullish and strongly recommend BUYING SOYBEANS HERE…with my own view, with my own money, being: If it’s going. If there’s ANY abnormal weather…There is NO TELLING how high they might go.

I might be dead wrong but this just looks bigger and bigger to me...So I urge you not to just watch it happen. Doesn’t mean it will work but this IS an absolutely tremendous 2 & 1. Period. Or if you don’t want to go that route, just Buy Calls and risk either all or part of what you spend. But however you do it, I recommend that you JUST DO IT HERE.

If ANY of the weather that is happening in the Southwest moves into the Midwest, my feeling is that the gazillions of dollars chasing markets today could potentially send Soybeans rocketing towards prices never seen before.

If weather is the driving factor on the upside, it's going to happen here and now, in the dead of summer...And I will say point blank, that if this thing hits $14.50, it will hit $18.50. My opinion and maybe wrong, but I firmly believe that is what we're looking at...And that THIS CONTRACT WILL NOT JUST LAY HERE FOR THE NEXT 8 HOT SUMMER WEEKS.

 Or if you want to just buy the calls…

And guess what? If there is a continuing drought in the Midwest, by the time the media starts touting it, this market will already be LONG gone…

And I don’t just draw these moves and slap up these big numbers as some sort of enticement…That IS how Soybeans DO move in a drought…And here are a couple of examples from a few past droughts I traded...

If you do think this makes sense, and you do have the risk capital, and you do want to do something with it, I’d firmly suggest you go ahead and move on it now. Both of those two drought examples do have any number of BIG “leaps” from one trading day to the next, and with every time that happens, it does get harder and harder to “get on.”

And as always, as strong as they are, these are my opinions and my view of what it is happening here might be dead wrong…

I  am all over this. Hope you’ll join me…I urge you to pick up the phone if you’re interested.

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: Soybeans