August 31, 2021
SHORT Corn, Wheat and Soybeans…Now
The charts below ALL look like giant tops that have spent the past 4 months with repeated “bullish” reports and events sucking in more and more investors on the long side.
And according to all of the bullish ongoing rhetoric out there, none of them are supposed to be anywhere near their 4 month lows.
I think this is as classic as it gets, and more so than ever, think they are ALL about to fall apart…
I might be dead wrong. This might be the losing “sideways” proposition that it has been since early May, but I view this as a giant opportunity.
I recommend owning puts, here and now in all three areas…Corn, Wheat and the Soybean Complex (either Beans or Bean Oil).
Harvest is either underway or coming. GET SHORT NOW.
And I do think they will all go relatively straight down. That just the way this stuff works. Row crop sell offs, especially when you consider how high these prices are, are generally a take-no-prisoners situation as all of those people who have loaded up long the bullish story become frightened-losing-money sellers…and eventually even start getting short…And as I have repeatedly documented and noted, all that selling does not just happen in a few days…The sharp move down often takes 5-8 weeks and culminates in a 25%-30% collapse in prices.
Buy puts in all three market sectors. Forget you own them for 30 days.
Do either the Soybeans or the Soybean Oil…doesn’t matter I think…but I own puts in both.
These markets are moving. Prices may be different by the time you decide to do something with this…
And these are NOT pie-in-the-sky expectations….What I expect…and what I have drawn…are normal moves for all of these markets…But you do have to spend the money to be in them. About $4500 covers all three market sectors. Do the math if I am only moderately right on ONE…or moderately right on two, or all three. And obviously, if I am wrong about all three you could lose everything you invest.
And for farmers, ask yourself if you REALLY think…that a few months from now as harvest is happening…we’ll still have $13 Soybeans, $5.30 Corn, and $7.20 Wheat???
It’s Tuesday and since Friday’s close, we’re already down 25 cents in Corn, 32 cents in Soybeans, 2.60 cents in Soybean Oil, and 10 cents in Wheat. According to the “experts” out there, THIS IS NOT SUPPOSED TO BE HAPPENING.
Don’t just watch this. Give me a call.
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, Wheat