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July 23, 2021

In spite of all sorts of UNENDING BULLISH talk from every ag analyst I have seen…about weather threats, and “if China buys,” and “strong demand,” and “tight stocks”, and problems in Brazil, and Argentina, and God knows whatever else they can come up with, the fact remains that CORN, WHEAT AND SOYBEANS ALL MADE THEIR HIGHS SEVERAL MONTHS AG0 and MY OPINION CONTINUES TO BE THAT ALL THREE OF THESE MARKETS HAVE NOW MADE THEIR TOPS…FOR YEARS TO COME.

 Check out the cash markets in all three…

I think you are dreaming if you are looking for $16.00 again…or even $15.00.

Take a good look at Corn here…Do you REALLY think you’ll see $7.00-$7.25 Corn again?


All three have been making quite wide swings in both directions, which in itself is, I believe, part of a classic topping process…AND ARE NOW READY TO TRULY BEGIN THE COLLAPSE I HAVE BEEN LOOKING FOR.

Since April or so, with all three having been LOUDLY touted on the bullish side from here to hell and back (“We might run out this summer!”), I therefore honestly find it unimaginable  that there is ANYBODY left who would be a buyer that has not ALREADY done so. In other words, EVERYBODY is already long and it is now time to see these FORMER bull markets do what I have seen them do on countless occasions during the past four decades: GO PRETTY MUCH STRAIGHT BACK DOWN…WITH THE HIGHLY LIKELY POSSIBILITY OF RETRACING THE ENTIREY OF LAST YEAR’S BULL MOVES…

 So I think all three should be shorted…

but Soybean Oil,

having gone as straight up as anything I have ever seen,

is at the top of my list.

It seems like once or twice a decade we get a market that just goes nuts on the upside…just straight up to fairly unbelievable levels…with the result thereafter always having been the same…THEY ALWAYS  HAVE AN EVEN MORE UNBELIEVABLY MASSIVE COLLAPSE, quite often doing so within a matter of months…As in Crude hitting $147 a barrel in 2008, then being back at $35 five months later…Or Cotton going to $2.20 in 2011, then back to $1.00 four months later…Or most recently, Lumber going from $400 to $1700 this year, then back to $500 in just 10 weeks…And while none of this means the same thing will happen in Soybean Oil, or that the opinion I have is correct, that IS how I am approaching this trade…with the perspective that there is (in my mind) NO QUESTION THAT THIS MARKET HAS TOPPED…AND THAT IT WILL BASICALLY DO NOTHING BUT TREND SHARPLY LOWER FROM HERE…RIGHT NOW…RIGHT HERE.

Here’s the long term picture…and as I have noted on the chart, IF THIS IS NOT A MARKET TO BE SHORTED, I DON’T KNOW WHAT EVER WOULD BE…Really, do take an extra minute and just think about what you are seeing here…and what the probable outcome will be…and has been a number of times here before (and in any number of other markets that BRIEFLY went ballistic).


 And again, NOTHING says it will be the same but here is how the recent rally and collapse did play out in Lumber…and I show you this because it IS an example of what I think is quite possible in Soybean Oil.


And here’s what it looked like on the daily chart…


 So start with this…Here’s the cash Soybean Oil chart for the past year…where it has gone from 25 to 80 cents a pound…


Common sense dictates that when supply and demand are out of balance, and bull markets occur, sooner or later supply WILL catch up…and then prices quite naturally DO FALL…to more “normal” price levels…And I am quite certain that this market is no exception…With Soybeans at $14-$15, I have zero doubt that six months from now farmers will have aggressively RAMPED up Soybean acreage and global soybean production will have exploded upward…and for this and other factors, it is my very strong opinion that Soybean Oil therefore has nowhere to go but DOWN…and sharply so.

 Here’s the long term futures chart…

 And here is one way to get short…

This might be a stupid statement but I DO THINK IT IS IMPOSSIBLE FOR THIS MARKET TO STAY HERE…or even close to its current record price levels. I MEAN, THIS IS NOT LIQUID GOLD OR ANYTHING…And believe me, as noted before, farmers all over the planet WILL be “replenishing” the Soybean pipeline…Not to mention that China, the biggest commodity user in the world, has recently instituted policies with the specific intention of forcing commodity prices lower…With this in mind, I DO THINK THERE IS MINIMALLY (and I do mean “minimally”) 25-30 CENTS COMING ON THE DOWNSIDE HERE…OR $15,000-$18,000 PER FUTURES CONTRACT…So, for me personally, if it becomes necessary to spend $1500-$1800 more than once, I will do so…In other words, if it’s going down now, and I have to “re-up” my investment, I will be doing so. Obviously, I don’t think this will be the case…I think this thing IS right now…but much the same as I was writing while recommending short Feeder Cattle when they were a record $2.45 a pound in 2015, my own personal trading perspective was/is one of, “I WILL NOT BE OUT OF THIS TRADE. THERE IS NO WAY THIS MARKET IS STAYING AT THESE PRICE LEVELS. I WILL MAINTAIN MY SHORT NO MATTER WHAT.”

As  always, just because I believe this so strongly, does not mean I will be right…And if I am not right, you will probably lose whatever you invest with me…As will I as well.

I would also add that this can be done with Futures…wherein the margin is $3000 per contract, and every 1 cent move, for you or against you, represents either a $600 gain, or $600 loss.

This is not just another trade. I have my own game plan and am fully committed to it.

Don’t just think about it. Call me and do something with it. Trades like this DON’T come along often at all…

 But before I end this…I want to quickly address one other existing trade…


And if Corn is tanking…? And again, it sure looks like it is…

Feeder Cattle have looked like they were GOING over and over…and over…during the past 4-5 months…but, NO QUESTION, all of the unanimous bullishness in Corn (which Feeders are fed) has been holding them back. BUT THAT, I BELIEVE, HAS CHANGED. Corn IS rolling over…and for all of the reasons I have listed for months, I TRULY THINK THE FEEDER CATTLE MARKET IS ABOUT TO EXPLODE ON THE UPSIDE…And I mean NOW…Maybe I am still wrong (early I’d say) but THEY COULD NOT LOOK ANY BETTER THAN THEY DO NOW…And I’m not stupid. I’m not wishing and hoping. For me, this game is about educated guesses and calculated risks…in the pursuit of “hitting it BIG,” and that is what I finally think I have here…Maybe wrong. Maybe this is a loser…but this has the look and feel of an incredible trade (no cattleman I know is bullish) and I will take this set up 100 times in a row.


Two GREAT, GREAT trades I think. DO THEM BOTH AS A “UNIT.” Do the math on how it could turn out if I am just moderately right…And then spend the money and don’t even look at them for the next 6 weeks.

I am extremely confident that, moneywise, it’s lift off time here again. Maybe wrong. Maybe these are losers but I am in with both feet. NOT because I’m some half-assed gambling idiot, but because 40 years in this sh*t does mean that “sometimes you just KNOW.” Again, but maybe I don’t... But that’s where I am…So if you have read this far, pick up the damn phone and call me and do something with this…I mean, really, I’d almost say that if you can’t see (and DO) the Soybean Oil trade, you ought to send me an email taking you off my list.

Highly, highly confident. Thanks for reading…As always, DON’T just watch (or use my ideas elsewhere, please). Get a PIECE of this.





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: Soybean Oil, Feeder Cattle


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