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Northwest Iowa | Remember folks, planting progress or not is new crop. Old crop is tight supplies. Basis improved in our area this week. Better and more applicable "news" for old crop. Monthly chart has a 62% retracement of the 2012 break is around 6.40. Not sure that will have an effect. This drive in both C&S seems like it is a new animal. My expectation, which is my opinion for whatever it is worth, is that old crop prices will stay high and continue to improve until the July contracts expire. Timely planting and high expectations will leave new crop prices at a steep discount until weather has an effect. Sellers will get their day of glory- at least for a while. Longer term, again my opinion, is that we work higher for some period of time, maybe 2 more years give or take. Could be some really interesting numbers moving forward! I base this on (fundamentally) 2 things. 1.) Huge inflationary pressure from extra $ moving into the economy from government. 2.) 5.5 year cycle low in corn (thank you for pointing that out CF) last spring about now. The resulting cycle high should be mid-centered within that 5.5 years but has some latitude. Technically, this original drive (wave or leg 1) has not crested yet. Still within a subdivided wave 4. Yeah, I know, too much information but in Elliot wave, every leg, drive, or wave subdivides into another EW progression. I have a fibonacci tool that I use that has been very good in many markets and usually with a few pennies in corn, maybe .10-.20 in beans. That tool has been way short in this run. I do some other tweeking to get my numbers and for now have been using 6.83 in corn and 16.97 in beans. I suspect that corn number (6.83) will be too low. I did discuss with a friend the other day and we both brought up that the drive from last fall to Jan was just buy it and hold on and it worked. Simple. The next drive will likely be much more complex. These sideways actions can really mess a guy up.
Thanks CX for starting the thread. | |
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What do you think...
