Shorts

[cottonpicken]

Tom brought up a good point on another thread.

Can you imagine what the short sellers are thinking right now.

Let them burn!

[cottonpicken]

Canola is fricken vertical!!!!!

We clipped 591!!

[cottonpicken]

I wonder how many "private consulting firms" are getting unpleasant phone calls this morning?

[charliep]

I remember an expression from a market outlook conference in 1988: "Bull markets are like airplanes - we've never left one up there yet". Been to the Ukraine and know all eastern

So cottonpicken, what are the strategies to come out of this bull market. Limit moves mean people are on your side - lots of buyers/no sellers.

If you were a consultant, you could advise a client as to when the market has peaked and have them pull the trigger for their entire crop at the top? Or would you use a more disciplined approach of selling some at select times during the year?

[charliep]

Hit the send button early. Just noting that the non traditional exporters will be noting current prices and responding with increased/more intensive production.

[TOM4CWB]

Charlie,

DO you often hit the send button early?

[Zaphod]

Interesting that the latest moves were responding to the USDA reports. Aren't those supply/demand factors.

Also interesting that the funds are important players, but certainly not the majority of the open interest in corn, beans and wheat (21% in corn, 22% in beans and 17% in wheat). That tells me they have some influence but can't push the market in a direction it's not already going. Exaggerate the move certainly, but not change direction.

I saw Ken Ball's comments in the last WP about the idea that fundamentals won't influence the market ever again. I hope he was misquoted. That's the same kind of talk we saw just before the dot-com bust -- who needs profits, it's a different economy now. Hogwash.

At some point, people need to sell. They can't stay long forever. So when do they pull the trigger, CP?

[TOM4CWB]

Zophod,

Old crop sales are great... it is the new crop sales I am concerned about!

[cottonpicken]

Charlie i tell my clients the same thing i tell everyone here.

1-we are in a commoditie bull market
2-the main reason, monetary inflation
3-clue number one,gold
4-clue number two oil
5-one dollar wheat would be ok if oil was 3 dollars,understand?
6-even in current macro thinking(which is so fatally flawed i wouldn't even know were to begin)the current situation of of the ag business model would point to an upswing.No capital investment for a insanely long time creates fundamental shortage which in tern leads to higher prices.(in a nut shell)

7-why the hell shouldnt grain move up?
everything else continually moves up in price but grain shouldn't


When to sell,when to buy?

buy low sell high

yes it is that simple

Whats low,whats high?
If something is below its 1980 high it is low.
Take canola for example- 726 in 1980.
Somebody(maybe his name is cottonpicken and maybe the date is nov 17 and canola is 437)may scratch his head and say, hmmm is it really out of the relm of possibilities that it may hit 874 by april 17.
And now as of today canola has made over 30% of the move.

is that luck,or understanding of the technicals and fundementals

[charliep]

I likely do. Will note I am one of the most risk adverse people in here and it shows in what I say. My recommendations are also made in a very generic sense because I don't know individuals business situations including what they have priced already, their financial situation, they risk taking ability/tolerance, etc.

Finally, going for the ride in the current market is easy - just stay long, relax and enjoy. The challenge will be knowing when the ride is over. Bad analogy again but the current market is like pointing the nose of a plane straight in the air and trying to guess when it will stall/drop like a rock.

[Zaphod]

Thanks for putting the pieces together. It makes more sense to me now. I'm still not prepared to turn into a raging bull, but I see where you're coming from. I appreciate you being clearer on your targets too.

[dfarms11]

"Charlie i tell my clients the same thing i tell everyone here."

Ok, I must be the slowest one here but Cotton I thought you were just a farmer? What else do you do/ work for?

[charliep]

With exception of wheat futures (and not all contracts), crop futures are starting to trade again (i.e. corn and soybeans). Will open interest drop (profit taking/shorts getting out)? Will be interesting the next few days. What the expression, bull markets need to get fed on a continous basis.

[jensend]

in the longer term the question is what price levels are sustainable? at ten or fifteen dollar wheat who can stand the risk of trying to produce with weather variables and inflating costs? won't the stakes just be that much higher and the producer hasn't been the winner over the past twenty years. extreme prices just mean extreme volatility and that is when capitalization is more critical. was the price spike in '95-'96 a good thing for grain farmers in general or did it just lead to higher costs and slimmer margins? as one farmer put it in the mid eighties, 'the last thing we need is ten dollar wheat.' he was right because all it is is inflation and that doesn't help the producers of agricultural commodities over the long term.

[cropduster]

Jenny.....go back to your HARROWSMITH lifestyle.......we don`t need your depression here!