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turdypointbuck
Posted 10/18/2014 12:40 (#4133395 - in reply to #4133357)
Subject: RE: chart posted



NW Barton County Missouri
roarintiger1 - 10/18/2014 12:17

Jsc - 10/18/2014 08:45

We know the rally off the lows was due to money flows out of equities to safer
positions. Markets were oversold so a pop was not a surprise. The price level we
reached was higher than I expected, but then I could not see the panic in the equity
markets coming. Fundamentals have not changed and are bearish. Prices should go
back and test the lows. Corn may hold, but I doubt beans will as long as S America has no major
issues. New lows in beans may come on the Jan contract. Novies are pretty much done.
I think corn basis is going to get very sloppy in a couple weeks as transportation gets pricy.
I guess the only thing I see strange is the fund long position at this time of year with the
kind of fundamentals we have. They have started to sneak out, but remain long. The corn/bean
ratio has a lot of work to do and the Informa type acres shows it will come. I think the crops
are very large. My long held 176.8 yield estimate is likely to be exceeded. We are not competitive
in the export market and other demand categories are likely overstated. As the crop gets larger
into the final report, the bushels will fall to the carryout and thus weaken values. In beans, it
is more about the transition from tight stocks to a flush supply which with Informa type acres
and a 46 bushel yield next year having potential to push stocks to 750 MB. The market will not
allow this so you can guess prices will have to sink pretty far in a very short time, which will take
care of that corn/bean ratio I mentioned. The demand side is good with 66% of the export projection
on the books. But we have plenty of beans to satisfy this. In general, this is my view at the moment.
Remember, fundamentals are not static. They change daily but are easy to track. I hope this helps.

So.....You say we are not competitive in the export market........Then, you say demand side is good. Nice job sitting on the fence. :)
J


I was thinking the same , tiger.
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