November 12, 2024

 The massive Corn and Soybean stocks,

held by farmers,

from LAST year’s harvests,

have NOT gone away…

The markets all spend a lot of time “doing nothing,” just going sideways…Let’s say 80% of the time…But sooner or later, they DO make the 20%-30% one way moves that are the NORM in commodities…and they DO, after putting everybody to sleep…or in this case, convincing them that “the lows have been made,” suddenly RESUME their bear market sell off…more often than not, on no particular news at all…just the simple fact that there’s a whole country full of supply (from TWO harvests) that HAS to be sold.

Corn and Soybeans have been in bear markets for 2 ½ years now…but have basically been sideways for the past 3-4 months, and like clockwork, have once again convinced analysts, and the farmers who follow them, that their forever predicted “bottom” has been made. I LOUDLY DISAGREE AND  CONTINUE TO SAY THAT THERE IS AN AVALANCHE OF SELLING COMING…RIGHT HERE AND RIGHT NOW…IN BOTH OLD AND NEW CROP…AND BELIEVE THE ODDS OF A FURTHER, AND FINAL STRAIGHT DOWN COLLAPSE OF PRICES IS DEAD AHEAD.

 
Of MAJOR, MAJOR IMPORTANCE…

Aside from the mountain of supply, if Trump follows through on his intent to impose tariffs on China…and I think he will…it will be EXTREMELY bearish for these two markets…And as I seriously doubt President Xi Jinping will be “kowtowing” to Trump’s threats, my perspective is that THIS BEARISH ISSUE WILL BE  OVERHANGING THE GRAIN MARKETS FOR THE NEXT 3 MONTHS…and can therefore only view this as having an ONGOING and severely negative impact on prices, which IMMINENTLY/SOON will result in new contract lows for both Corn and Soybeans…

And if you want to see massive farmer selling, just watch what happens when/if we DO get new lows. You’d better believe that all those USA farmers, who have been supposing some sort of rally was coming, WILL start to panic…and sell…and they will ALL be doing it at the same time…and that IS when we get the 20-30% decline that history HAS shown to be a norm.

An oh yeah…Don’t forget that South America’s crops will be starting to come in just about the same time that Trump takes office. That ain’t bullish either…

I may be naïve, but I see ZERO reason to be bullish here…and every reason in the world to be aggressively short.

I RECOMMEND BUYING THESE TWO PUTS TONIGHT OR TOMORROW…I CONTINUE TO SEE THIS AS A BIG, BIG TRADE.

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, Corn