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Theodore, Saskatchewan | Sat,
On the other thread I will post a chart of the corn, long term nothing wrong with your trade and I can explain my thinking but I did give a different view.
I agree with you on the RBOB it looks to be sideways / down to me. The big gap back in June was interesting but then buyers came in and up it went. No breakout to the upside though.
This last week it tested a downtrend line and failed, so I would look for it to trade down to 2.50 before finding some support in the sideways trend and close to the green median line I have drawn (which hitting it would be below the red support line).
Everything I have heard regarding e plant corn use is bearish as compared to 2011. You are really looking for corn use numbers and I would agree with projections such as:
Ethanol 4 - 4.5 billion bu
Feed 4 - 4.2 billion bu
Export 1 - 1.3 billion bu
Meaning 10 billion bu of corn will do it at these prices. I think this is what you really want to know if I agree with and if I take it as bearish. Long term it is bearish, certainly if 97 million acres of corn next year have an average yield above 140 bpa (140 bpa would be the average yield of the last three years so no need for USDA trendline talk at the moment and possible drought scenarios).
So we should go back to the charts because the real answer lies with time........
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May/Partner
