December 15, 2021

 Regarding Crops…and Commodities in general

First up, here is a bit of evidence that I believe indicates that all of the stale bullish analysts (who have been touting the upside of grains for months on end) are REALLY stretching for reasons to justify being bullish the row crops, particularly in Corn and Soybeans.

This is off the morning newswires…

DJ Corn and Soybeans Higher Amid La Nina Watch

Wed Dec 15, 2021  09:54 EDT

Corn and soybean futures trading on the CBOT are higher Wednesday , with grain traders placing their bets on how much the La Nina system will affect South American crops. “ current conditions in South America are quite favorable, especially in northern and central Brazil,” says xxxx of xxxx. “ The question is how far along the crops can get before the current La Nina strengthens, if in fact it does.” Should La Nina strengthen and crops get drier, then crop loss is expected in Brazil and Argentina—although how much is key for prices.

Ok…What is implied here is that although the weather in South America is currently “quite favorable,” it makes sense for traders to be “placing their bets” on the long side, NOT due to anything regarding current supply and demand, but simply because the weather MIGHT turn for the worse…somewhere out there in the distant future. This, to me, is just about as absurd as it gets, and simply drives home my perception that the whole ag world is already long these markets…AND LOSING…and now are trading on nothing but bullish hope, and frankly, inventing reasons to stay long. And “wishing and hoping” in commodities about the worst strategy you can ever have.

I REMAIN ULTRA BEARISH ALL OF THE ROW CROPS, AND OTHER COMMODITIES,  AND CONTINUE TO MAKE MY “SELL EVERYTHING” RECOMMENDATION INITIATED  ON NOVEMBER 19^TH.

So that was three weeks ago and I obviously still feel the same…And generally recommend owning puts in all of the markets following…

 Cotton had been in a bull move since April, 2020...with virtually every cotton analyst on the planet (that I could find) preaching "Sell here!" ALL the way up. And now? They are all regarding the recent 10-15 cent sell off as a "pullback," to be bought in other words. I disagree. Those same people would say I'm nuts, but I DO think we're headed straight back to the 80's.

The truth is, as I put these newsletters together, I form my own impressions as the ideas in my head become crystallized on the screen…And what has occurred to me here is that the biggest leverage is in Corn, the Soybean Complex, and Sugar…and while my basic recommendation is to own puts in all of these markets…and this is right here, right now…I could make a good case for just going with those three for the time being. Crude is impossibly expensive, and Cotton puts ain’t cheap, and the Wheat needs a breather (maybe) which narrows it down to doing “units” of one put each in Corn, the Soybean Complex (Soybeans and/or Soybean Oil) and Sugar…thereby spending something like $3500-$4500…and simply understanding the math of where you come out dollarwise if just one, two or all…or none…of them work.

As I am forever pointing out, I never know which (if any) of them are going to go first, last or biggest…but I DO see major potential in every one of them…Otherwise I wouldn’t be recommending them.

THE BEAR MARKETS I HAVE BEEN LOOKING FOR ARE BEGINNING TO HAPPEN. IF YOU THINK I MIGHT BE RIGHT, I URGE YOU NOT TO JUST SIT THERE AND WATCH…Pick up the phone and call me.

And yes, the Fed made their announcement today…but still did NOTHING…while Eurodollars made new two year lows. So we remain short that market, and basically expect to stay that way…at least until the FED does SOMETHING other than “plan to raise rates.”

Love to hear from you…and what YOU think.

EVERYBODY IS LONG EVERYTHING. GET SHORT.

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, Wheat, Soybeans, Soybean Oil, Sugar, Eurodollars