November 22, 2022

 $5.00 Corn?

I am not about small trades. Any time I make a recommendation, it is because I am anticipating a large percentage move…and the signs, in my opinion, are pointing more and more towards exactly that in the Corn market.

Moving average crossover systems are designed with one thing in mind, that being to identify and participate in long term moves. This sort of approach can chop you up (losing money) as markets grind sideways, but when a big move is beginning, systems like this one, using a simple 12 and 48 day “crossover,” WILL get you in the market fairly early in the trend…and if followed…KEEP you there.

 New 3 month low closes in Corn…According to all the “pros”, this is NOT supposed to be happening…

 Same as we saw in these two crops below…and as noted in recent letters…just about every other commodity on the board…

And today? Analysts, experts and brokerage houses sure as hell aren’t looking for $5.00 Corn…To the contrary, they are still talking about Ukraine, and Cattle Feeders, and China buying, and Argentina weather, etc…and really…ANY stale drum they can find to beat that supports their bullish crowd following case.

I CONTINUE TO LOOK FOR EXACTLY THE OPPOSITE… AND I DO RESOLUTELY BELIEVE THAT CORN WILL HAVE TRADED UNDER $5.00 BY NEXT SPRING.

And as always, I might be dead wrong, which does mean losing money, but I THINK THIS TRADE HAS DEVELOPED INTO HAVING GRAND SLAM POTENTIAL…to the extent that I am positioning in both slightly out-of-the-money puts AND DEEP OUT-OF-THE MONEY PUTS.

To me, this stuff is all about seeing a trade, assessing its potential per historical “norms,” and then putting the money into options based on what might/could happen…From there, it’s just doing everything you can to sit tight if you’re right…keeping in mind that the math of options getting deep in the money is very real…and CAN therefore lead to hitting for VERY large multiples…As always (again), as an options buyer, when are wrong, you can also lose every dollar you have on the table.

Here is what I am doing, right now…And I DO want to be there (and am) ahead of the upcoming holiday.

And for any farmers who are holding out on sales until January for tax reasons, in Corn and Soybeans, I would suggest that the markets are RARELY that accommodating…and that you are in a boat together with just about every other producer in the country…ALL WAITING TO SELL…and that the FUTURES markets can easily “anticipate” that during the next 4 weeks…by which I mean, we could easily be a LOT lower by the time we get to January 1^st. So whether you want to call it spec or hedging, my recommendation would be to pick up some puts now…DON’T sit there and expect to wonderfully sell Corn at $7.00 and Soybeans at $14.00…when everybody else is hoping to do the very same thing.

I think this is big. Been saying that for a while I know…But it HAS been big in Crude, and Cotton, and Wheat and Gold…and all of the other markets I’ve been recommending on the short side that have cratered…And I DO think the same IS now coming in Corn…And Soy.

Call me if you want to get on…Again, I’d say make the move AHEAD of the holiday…tomorrow, in other words…or on Friday (a short day).

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, Soybean Oil