| IN555 - 10/5/2017 13:54
I think you would acknowledge we have no way of knowing next years yield correct? We could easily vary 5% from trend. Lets call that 8.5 bushels on corn. So we could be anywhere from 180 down to 163. Those two extremes mean a lot to price, to say it doesn't is foolish. To claim a chart can predict which is coming is also foolish. I will acknowledge that if I told you which was coming you could likely point out a price to target and be very accurate. My thoughts are if this soybean yield lands near the usda we are likely continue in a side ways market. I don't see any reason we would take out the 2017 highs or the lows during the next 8 months unless we get some SA weather help. You said yourself a fork doesn't work well in a sideways market so that statement in itself says a fork doesn't predict price it merely shows the probabilities. I would love to study your method but no matter what will acknowledge that it is just a method to predict possibilities and is not a crystal ball to predict the future.
I think projecting yield is pointless jibber jabber synomous with guessing one price in a 200 day moving average. So you got it right...what about the other 199? Always amazed me how many people attempt to, and trash the USDA because they are wrong, when they have resources way beyond any of us...but we know and they don't. If yield does not equal price...why attempt to project yield? Price is all we really care about other than what we grow on our farms. The only reason why I would even entertain yield would be to determine what I might do on my farm. If price is suggesting continued weakness is possible on the coming years, and since yield is a factor in price, then we should assume that yield Will be good. With that in mind, in this environment bushels pay the bills. Don't cheat on nitrogen, population, fungicide...pour the coals to it. On the other hand, if price is suggesting higher prices are likely, one might cut some because there will likely be an overriding circumstance like weather that will mitigate the effect of the extras.....such is growing a crop.
Yep..i did say that forks don't work well in a range. But again not all forks are created equal, and all of them are leading you correctly. If you are drawing on the pivots inside the range it is a tough gig. Price will break sloped lines because price is horizontal if for no other reason than time passing , but very much relevant to the story. If on the other hand you might draw off the big swing, there is lots of information to be had relative to that frame. For example, in 2004, if you had that fork drawn and were watching it, you would see that price could not hold the LML on the couple attempts previous, in fact, each thrust was deeper than the previous. Effectively price is saying that it is too weak to hold that frequency. So if you are expecting a pendulum move, you got a huge problem. You then had the rally of 2004, which again was stopped on the highs with that frequency, and price comes unraveled and sells if sharply. Price told you for two years the i reveling was coming. Now what has happened present day? If you drew the similar fork, price has again not held that MMM. Does that mean we are gonna collapse today? No, in fact we made a HL just like on the years preceding 2004. But that failure to hold the line just told you, if you are hoping for a pendulum move, or new highs, you are smokin hopium. So in a lot of ways price is doing a very similar thing as pre 2004. Guys like to draw forks that price just bangs off them, and those exist. But every fork gives you information as to what is going on. So armed with this information, are you gonna buy into whatever spin on the next rally is, thinking it's "The big one", or are you going to listen to price, the one thing that has no emotions, no biases, no desires? We want to sell that 2004 rally in the present day. We know it is likely but do not care why it happens. We also know with a high degree of certainty that a 2004 type collapse will likely follow close in its wake....because price says so.
It's ok not to believe 55. One thing is for sure, if you think it doesn't exist, it never will too you. You will never see the poke if a ML as meaningful, or that you can connect to bars extremes and project price forward for years. It is ok....really.
Take care |
Is this the new normal for yields?
