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Mascoutah, Illinois | I was wondering what folk's thoughts were on the June 30th USDA Report coming up? I could try and take a stab at it, but I would be nowhere in the ballpark. I made a post about two to three months ago about the opportunity to buy inputs at a much cheaper price later on this summer. If you are flush with cash, you can only hope this report is a bearish one. Why? A nice big swoop lower in commodities along with crude oil would be a huge opportunity later on in 2011 and 2012. If, and I mean IF you can hold your grain and be patient you may have the cake and the opportunity to eat it also. This crop has little if any chance of being a monster on either side of the ledger whether it be corn or soybeans. Am I bullish? NO, NOT YET. The outside influences in the market have to play themselves out before the pendulum swings back to the bulls.
Coup has this thing nailed spot on. We had a disagreement sometime back because I was looking at the outside forces and felt there was a correction coming. Have the fundamentals changed? No, they may be getting stronger. This is a game of cat and mouse in my opinion being played by our government. I am not looking for you to agree or disagree with my statement. It is just an opinion. I believe the government has wratched up the markets when they felt they could and have wratched them down when needed to do so. They played their hand with the releasing of oil out of the SPRO and in my opinion, they made one of the biggest mistakes in US History. It is not the government's responsibility to dabble in the markets, but now with the bailouts of 2009 they believe it is their God given right to intercede when they feel like it.
If we see crude trade into the $70's, corn print a number somewhere between $5.20-$5.30, and soybeans around the $11.20 area it will be time to back up the boat for the mother of all rallies. The consumer would possibly be enjoying sub $3.00 gasoline again. Couple the huge stimulus of energy costs being lower and spending picking up along with a subpar crop and you have a problem. Could it be as swift and historic as the "Internet Bubble" in terms of prices moving higher? Yes, I believe so.
Be patient at this juncture and do not be the fool who gets chased out of your position. Endure the pain in the short term and make the very most of it. Buy inputs at a discounted price to a month ago and market your grain once it is in the bin. If you are forward contracting with nothing in the bin, I believe you are playing Russian Roulette with your operation. This weather situation and the potential of more flooding and levy breaks does not bode well for many.
I am still bearish in the near term, but I have targets in place and a very keen eye on the consumer. When I decide to flip my stance, you will see it front and center right here. I can only preach patience and taking advantage of an opportunity coming up with lower inputs for 2012 and the potential of taking out the highs of this spring sometime in 2012. The cleansing period is about half done in this correction. Could it end as early as next week? Possibly, but I am hoping it doesn't. | |
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Kind of wondering what you think about the June 30th report?
