August 6, 2024

Still Bearish Corn and Soybeans

I had an interesting conversation today with a man for whom I have great respect. He’s been in the grain elevator business (the people who buy crops directly from the farmer) on both the individual and corporate level for most of his life, and therefore very much understands the Corn, Wheat and Soybean markets from the farmer’s standpoint…He had just returned from a trip through the Midwest and his commentary as to what he saw and heard left me more bearish Corn and Soybeans than ever.

To summarize what he told me: The crops look fantastic everywhere. And everywhere he went, with everybody he talked to, all he heard was, “Corn, corn, corn! What are we going to do with all this corn?”…that farmers everywhere were still holding record quantities of stored corn, and with harvest dead ahead,  and the bins already full, they were wondering where were they going to put it all…with his answer being, “They’ll do what they always have to do. SELL IT… And they gotta do it before the new crop starts coming in…no matter what they get for it.”

The truth is, this is exactly what I’ve been saying for some time now, but when I hear it straight from a guy who knows what he’s talking about…who’s just seen and heard it all straight out of the Midwest…? IT MAKES ME ALL THE MORE CERTAIN, THAT ANY DAY OR WEEK NOW, MASSIVE FARMER SELLING WILL CRANK UP THE STRAIGHT-DOWN, AND FINAL, LIQUIDATION PHASE I HAVE BEEN ANTICIPATING IN BOTH CORN AND SOYBEANS…I STILL LOOK  FOR $3.00 CORN AND $9.00 SOYBEANS.

Yesterday’s action, when both Corn and Soybeans closed a bit higher when Stocks and EVERYTHING else on the board were getting hammered, did give me pause, and did result in my deciding to exit all of our soon-to-expire September Corn and Soybean Puts…BUT…as I wrote last night, I absolutely expect to be short again in the very near future…especially, and immediately, if either contract made new contract lows, which, quite frankly, may be as early as tomorrow.

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Give me a call if you’d like to participate.

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: Corn, Soybeans