Posted 2/7/2019 16:15 (#7304167) Subject: I'm not so excited about short to mid term anymore
My recent posts have indicated that I was bullish in the short to mid term but bearish long term on the corn market. I was saying that based upon opinions I had developed from mid-2018. Based on various things from last year I had hoped that this year was going to be the year where we had one last good selling opportunity before things really took a dump. I have not done hardly any charting since then. I was pretty busy from September until mid to late January and am really just now getting back into charting some.
When I did some charting the last few days, I saw something that I should have seen back in September. The circled area on the attached chart is not a good sign for short to mid term price in my opinion.
If price breaks the LML and really struggles to get very far from the LML, that's a sign of weakness relative to that set of median lines. Shortly after seeing that a friend talked to me with his own reasons for concerns about our pricing opportunities in 2019.
I don't know what's going to happen. I'm no good at charting or marketing but I do know that it doesn't take much of a drop in prices from where we are to make things unpleasant for 2019. Honestly, I still think it's possible to look at $4.50+ corn this year on the nearby contract and if that happens everyone who hedges lower will be kicking themselves. But if corn drops a ton from here, everyone who didn't hedge here will be having unpleasant conversations with their lender if they are leveraged very much.
If you'll remember my previous post, I said long term I think the corn market has not extracted enough pain from producers. Wheat went to 28% of the highs at one point. If corn did that we'd be looking at below $2.50 corn. I'm not saying that's going to happen. I'm just saying if I sell Dec corn for $4 instead of $4.50 I'm going to be a lot happier than if I had to sell for $2.50 to $3.30 instead of $4.
My main point of making this post is that I don't want anyone to have been bullishly swayed by anything I recently said. I have no idea what the heck is going to happen this go around. Last year was way easier and I still had a heck of a time committing. This year I think will be much harder to figure out.