November 8, 2021
I think this chart says it all…
Why “10-15 cents in a matter of weeks?”
Soybean Oil futures made their high tick about 5 months ago…Since then, while it was just going sideways (while the rhetoric has remained forever bullish), here are what some of the swings have been:
10 days – 10.5 cents
5 days - 14.5 cents
8 days – 13 cents
5 days – 6.5 cents
8 days – 7.5 cents
3 days – 5.3 cents
4 days – 7.4 cents
12 days – 8.5 cents
2 days – 4.5 cents
6 days - 5.6 cents
12 days – 6.6 cents
The point here is: If it’s making moves like those while going sideways, I can assure you that when/if it LEAVES this sideways formation and starts down…which I believe it is trying to do right now…to move 10-15 cents in a matter of weeks…or for that matter, 20-30 cents within a few months…JUST LOOKS EASY TO ME. I mean, really, part of making guesses in the markets IS relying on what you’ve seen before…100’s or even 1000’s of times…and I HAVE SEEN THIS SCRIPT BEFORE…which does not mean I have this right…but I do think this is a hell of a bet…And I think it’s here…and right now…I literally think ANY DAY NOW could see a 3-4 cent one day downswing.
And the Soybean market appears to be leading…with new 8 month lows today…likely confirming that the top is in…. And my guess is that we now have an entire nation of farmers getting antsy about having listened to the endless bullish STORY from ag analysts...leading them to NOT have sold what they could/should have at solidly higher prices during the past 3-4 months…And, no different than when anyone is in a losing trade in stocks or commodities, and it starts costing them more and more money the further it falls, farmers will start doing what millions of investors have done in the same situation…millions of times…THEY START SELLING…as in, “Just get it sold! Whatever today’s price!” And when everybody is in the same boat? Well, that IS when you get the straight down sort of move I have been looking for.
Take you pick…but I urge you to pick something…
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