I follow about a dozen other analysts in the daily flood of emails I receive. I will not name names but some have been relentless, ruthless bulls even as CZ has trended lower essentially since last September’s high at 6.65. 6.05 has been the high for the year. That came on New Years’ day. In spite of the fact that the trend is lower, every little rally is taken as the start of the new rally back to 7.00 corn. CZ had a rally up to 5.70 a month ago and we have ground lower since then. Today’s fresh 11 month low at 5.12 came within a penny of the 26th month low.
Either corn is basing at this time, or just taking a break in the down trend. After doing this since 1991, in my opinion, its just a pause in the cause before we continue lower down most likely to 4.85 or possibly 4.65. I like 4.65 because that will be a $2.00 haircut off the high.
Unlike most letter writers, I actually personally trade my opinions. I eat my own cooking.
For that reason, I am looking forward to selling CZ between 5.30 and 5.40 on this technical rally. CZ is only rallying on the strength from July beans. Sound’s silly? Your are right, it is.
Post this. Time stamp it. Send it to me at Xmas if I turn out to be wrong, but I believe you need to be selling rallies here in CZ. I can’t even think about getting bullish until we settle above 5.75.
Farmers haven’t sold anything. They think they are guaranteed 5.65 corn. When harvest comes and they realize its revenue insurance and not price insurance. When they get no check for their claim, then they will understand why insurance is not insurance, unless you have a crop loss.
Once again, they will be selling grain in the hole because, “they couldn’t have imagined prices going lower”. A case in point, Chicago wheat was at 9.00 i tried to get guys to protect 8.00 wheat for 30 cents a bushel. 80 percent wanted no part of it b/c they thought the drought would lead prices higher.
2.50 cents lower, after freezes, drought, etc etc etc. they still think it can’t go lower.
The CZ is shaping up to be the same trade, only in slow motion.
CER