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| I don't think our little world of fundamentals is not the same world the guys buying our market are in. A few years back I watched rally after rally on what was often bearish news. The market was being pushed up by little more than someone's guess that ethanol would cause us to run out of corn (given record usage by other end users). At least that's how 'we' rationalized it. The wheat market ran up to $20 and it seemed like the few guys doing it really didn't think it was a big deal - just one more todo checked off in their planners. Maybe its just the scale of the money involved that makes their sneezes into our tornado's. This rally going up could have been nothing more than some rebalancing or repositioning internal to the funds which may not even care about corn fundamentals of the moment. Seems pretty strange to me, but their behavior isn't like the commercials or end users.
Another thing to consider is that end users that wish to stay in business have some level of coverage that was put in place months ago. There are reports and analysis of end user profitability, but most of those take a snap shot of current numbers and make a conconclusion. No one left does business that way. There was a guy on stock talk wondering what happened after raising about 100 hogs buying traditional feed stuffs at market prices, he lost $30/hd. It's a business of digging around and trying to lock in profitability any time you can - no waiting around. A big coastal end user doesn't stay in business running around looking for feed at the last minute. It's been really difficult to keep above zero, but if you wait for something more the chances of it turning very negative are too great. | |
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Who's Selling ?
