I’d like to see how we trade on Monday and Tuesday. I have seen in the past where a number, once digested, gets rejected.
Only real surprise today was that USDA increased feed usage by 300MMt and decreased exports by 200Mmt. I think exports are way, way lower than that. Bottom line, we need to do some rationing in old crop.
Best way to profit from this, buy old crop/sell new crop. Buy old crop calls March, May and July.
Buy new crop puts out in Dec.
I also want to be short new crop beans. I think we have one more leg down before I’d want to get long .
I wrote last week about the amount of advisers and gurus who were bullish corn and wheat. After sitting through a 90 cent haircut in corn and over a $1.30 haircut lower in wheat. I actually think now is a good time get friendly and get long corn and wheat.
So that’s my bias. Long corn and wheat, short new crop beans.
In the Dow, Looking at YMH ( mini Dow) I am out of the game except for the following. I have resting sell orders at 13,490. Why not 13,500? Because I don’t want to miss getting short just trying to get that tick on the order. While new money has been put to work, I continue to hold fast to my thought that we are really just range bound in a 1,000 pt trading range.
Until we settle above 13,500, I want to be short against it.
Have a great weekend.
CER