Friday January 11th at 11PM, the USDA will release the final crop report for the 2012 grain crop. 5 out of the last 7 years, this number has produced a LIMIT move in response to the information released.
Plan Accordingly.
If you are a hedger: Take the proper steps to protect your unpriced grain. We have just sat through an 80 cent sell off in the last Month in new crop CZ corn, Over a $1.30 in WN new crop wheat, and close to $ 1.00 in SX13. Old crop SH has failed to move above $15.00.
The Chinese pulled at least 3 previous sales which greased the skids lower. US wheat saw some interest from Egypt, of all places. That should have been bullish. We slid lower like you know what through a goose.
The winter wheat was planted in dust. Folks are talking a repeat of the Dust Bowl of the 1930’s (interestingly, well before Al Gore was even a gleam in his US Sentator Dad’s eye).
Yet, prices can’t hold a bid… What is the underlying bearish move?
The funds remain long corn and beans and short wheat. At what point do they flip and get short?
Friday’s report may be the catlyst.
I’ll list some trades I’d like tomorrow and Thursday in front of that USDA.
Are you going to be a contrarian and go against the recent 1-month sell off? Or are you going to take a longer term view and get short this grain market because its not acting right. When a Market gets bullish news and sells off, that’s a sign of an underlying issue which “most folks” (to use a favorite Obama-ism) have not yet taken notice of yet.
I have my own ideas.
I’ll write more tomorrow.
As for the Dow, We are range bound, now looking ahead to the Debt Ceiling battle, in the wake of the asinine fiscal cliff. Range bound trade demands that you only place positions at the extremes, and resist the temptation to try to catch every gyration. Doing so can make you 1)poor, 2) upset and 3) poor. All three are bad outcomes for traders.
CER