the brutality of corn

[TOM4CWB]

BP,

Knowing where a person makes a living does give real insight into the advice and motivation behind it.

Anyone care to share what Drew Lerner is saying now?

I note that Drew was really on the right track in the April 12 interview... it is actually almost scary...

[jdepape]

Lots of good comments here but the best one
here in my view is Tom's:

"It is important that we 'feed' the market on the
way up."

The most sound approach to farm "marketing" is
to separate speculating from merchandising.
Using Tom's approach, you can act on market
signals like spreads and basis to dictate the timing
of your cash sales. But you still make sales.

If you're a raging bull, you can still have a solid
marketing plan like Tom's - you simply buy futures
or calls (or sell puts) to speculate.

If you're holding grain in your bin "waiting" for a
good time to sell, don't kid yourself - you're
speculating.

What if you see a top forming and you've turned
bearish? As a speculator with grain in your bin,
do you sell everything in the bin and short
futures? If you only sell some of what's in the bin,
then you're still long. And if you're bearish and
see the market falling, why would you hold any
inventory?

Most guys who speculate with grain in the bin,
only trade from one side of the market. They're
never really short so their trading opportunities
are basically cut in half.

If you truly want to speculate (trade) then develop
a merchandising plan for your physical grain and
stick to it. Then open a trading account to trade.

As for listening to market "advisors". I learned
very early in my 30 years of trading that you
make your own trading decisions - as
cottonpicked has said many, many times, "do your
own due diligence". Take what Errol says,
combine it to what Kostal or Jubinville says, add a
little Drew Lerner and some online information -
and make up your own mind. Errol may have
been wrong but his view is valuable in that it is
clearly part of the market. When you do a
complete market scan, you want to know what's
bullish in the market, what's bearish in the market
and what could change. If you're so bullish you
don't want to listen to countering arguments then
you are setting yourself up for failure.

Does the viability of your farm business really
hinge on your success at "picking the market"?

I put absolutely no stock into anyone's projections.
When you follow someone else's opinion and it's
wrong, you learn nothing from it. When you follow
your own analysis and you're wrong, hopefully
you learn from it.

It doesn't matter who they are, they're going to be
wrong some times.

But then again, you don't have to listen to me
either.

[charliep]

Will let Errol speak for himself but
will note he was among the first to
question the USDA corn yield of 166
but/acre.

How many would have forecast the Midwest
drought on June 1? How many bought calls
on the early June dip to replace stuff
they sold/forward contracted? Why not?

The cattle feeding industry is eating
$200/animal loses both sides of the
border. Things will change on the demand
side.

[rockpile]

A lot of good comments on this thread. But there
are some mad bulls out their who seem to have
broken the fence and have lost any semblance of
self discipline. My view is that we're very near the
plateau, too much speculator money already
propping markets, and the demand function is
going to soften. But there are 2 items that haven't
even been touched yet. 1. Come Aug 1st, have the
grain cos secured ongoing contracted sales, to what
degree and how far out or are they just using
derivatives to fill the elevators once and then see
what happens. 2. In a post CWB world, where are we
sitting with rail capacity and agreements, car
allotment, etc. Will product get shipped in a timely
fashion? I'm speculating on second hand
information but from what I was told is that since
the new management at CPR and Pershing Capital's
involvement grain shipments will receive low
priority until a 25 to 50% increase in tariffs is
achieved to bring revenues in line with the higher
ror stuff. Just more things to worry about. Oh yeah
and last week Agrium reported that the drought in
the US will result in heavier fertilizer usage and
higher prices next week.

[rockpile]

Whoops, I meant next year.

[errolanderson]

Really enjoyed reading the comments on this thread. And yes, I'm old, grumpy and ugly enough that insults actually make me feel good.

Tom . . . you hit the nail on the head regarding the board.

John, you mentioned I'm wrong. Well my friend, the game isn't over yet. In fact, dare say that we might be only in the bottom of the 2nd inning right now.

What lies ahead may shock all of us when the global credit crunch hits in force. Global economies patched together by central bankers is a near-sighted band-aid solution. Canada will be affected . . . and yes even canola prices.

The statements made at the beginning of this thread are true. And truth can hurt. My assessment of a market is; call a spade-a-spade. And if this means running over some emotions, so be it. The market doesn't care.

The corn rally has run its course from an economics point of view. Speculators may run it into a short-term final blow-off top, but the length of this event may be counted in days IMO.

What speculators do, or having the worst drought in 70 years are totally unpredicatable. But I stand by my comments over the past few months. What lies ahead (likely post Olympic) will impact agriculture across Western Canada. The price sky is not the limit as we may witness very soon.

Errol

[BTO_farmall]

And Higher, And Higher, And Higher, AND HIGHER!!!!!!!!!!!!!!!!!!!!!!!!!!!

[jdepape]

Errol - funny that you single me out - to be clear,
you were getting a lot of heat from others.  I said
you "may have been wrong" (notice it was in past
tense) because you mentioned in another thread
how you've been wrong for so long you "can't see
straight".  

People may think you're wrong or dislike your
message, but my comment was that you should
never be expected to be right all the time anyway.  
Good analysis and decision making considers all
well thought out views - my comment was
directed at those on the thread that don't seem to
appreciate your views; for what its worth, I'm not
in that camp.

You're an analyst.  You tell us what you see
happening and comment on the big issues -
China's economy slowing down, global economy
imploding, corn demand destruction, canola
technically overbought, etc, etc.  That's your job.  
It's the decision maker's (farmer's) job to decide
what to do with that information.

[errolanderson]

it's time to just let the market to do the
talking

[BTO_farmall]

Fight, Fight, Fight, Fight, Fight!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!