Market sentiment and fundamentals

[malleefarmer]

You all know the fear greed hope panic cycle what ever it is.

Funny here farmers as the market is rising farmers are getting more bullish, even here on abgriville none of you guys in rush to sell.

Drought I know and other fundamentals, just wondering out aloud can it keep going. Some of the charts etc etc pitchforks forks candles etc pardon the pun but pointing to tops.

Fundamentals in current environment should win.

101 give me a lesson.

[farmaholic]

Will technical chart analysis out weigh supply and demand "fun"damentals?

[malleefarmer]

Will technical chart analysis out weigh supply and demand "fun"damentals?

Dunno mate really dunno.

Harvest will start here decile 8 to 8.5 prices.

Most will sell 80% or 100% if market keeps rising will focus on capturing 21 prices in say March April .

You guys with storage and little need for cash will probably sell your 20 harvest in the March April 21 peak which used happen always until say last five years.

[furrowtickler]

You all know the fear greed hope panic cycle what ever it is.

Funny here farmers as the market is rising farmers are getting more bullish, even here on abgriville none of you guys in rush to sell.

Drought I know and other fundamentals, just wondering out aloud can it keep going. Some of the charts etc etc pitchforks forks candles etc pardon the pun but pointing to tops.

Fundamentals in current environment should win.

101 give me a lesson.

Been wondering the same here for the past week.
This does not happen very often. Sold enough to pay some bills but a hail reduced crop does not leave us us with a large amount to sell . Need as much as possible from the market but been there only to watch the market disappear faster than it went up .

[bucket]

Its hard to get excited about selling when the elevator puts you off on a new contract because they haven't got September deliveries cleaned up...

The fact that in this area there is limited spot delivery, that for some guys is a good enough price to pay some bills since they maybe don't have land or equipment payments.

No spot delivery is tough to convince me that the market is working for full value...and I do not enjoy hauling a delayed contract late only to find spot is a better price ...I like spot delivery and price...if i see good weather...I am a fair weather farmer as my rep once told me....

Currently I think backlogging can help the graincos keep the price lower....the graincos thanks to Townend thinks there was a big crop....

When the contracts are cleaned up and everyone is reasonable current thats when the marketing reps will have to do their jobs and so will the markets ...those winter trains maybe harder to fill than the graincos think...

And I think the carryover next July will be smaller than most think...there will be empty bins by march.

My thoughts ...

[errolanderson]

Mallee . . . China’s in the driver’s seat. China keeps buying, prices go higher . . . China stops buying, prices go down.

It will be interesting to see if there is a change in China buying patterns with a change in U.S. President. China tends to buy in-spurts, then stops and cancels deferred business (from past history).

Fundamentals remain strong, technicals screaming overbought.

[Rareearth]

This spring( before the spring thaw and any rain fall, snow contributes little to yield) the head lines and talk will be about 0 carry over, farmers sold out of grain and the impending droughts in many of the major export- growing regions around the world.

With Covid, record exports, record demand, etc and drought this market has legs (long legs) until something major, - call it a Black swan changes supply and demand prospects.

[bucket]

It seems China is short grain....if the world knows it ,,,,what large corporation or country wouldn't take a position on any cancelled grain?

China will eventually have to buy it from someone...If they are short those stocks won't be rebuilt by next July ..will they?

Its just too bad that Canadian farmers don't know sales because that record grain movement by the railways has to be going somewhere....spidey senses says it is eventually going to china ....and very cheap.

[farming101]

You all know the fear greed hope panic cycle what ever it is.

Funny here farmers as the market is rising farmers are getting more bullish, even here on abgriville none of you guys in rush to sell.

Drought I know and other fundamentals, just wondering out aloud can it keep going. Some of the charts etc etc pitchforks forks candles etc pardon the pun but pointing to tops.

Fundamentals in current environment should win.

101 give me a lesson.

O we're selling alright. Deliveries to licensed facilities are 21.3% ahead of last year at this time. And last year was the best start to deliveries in the last 10. So, like ever.
And it's priced too. Most big graincos will be contracted. Smaller places like feedlots will likely have a quote recorded in a notebook or price is displayed on the wall. Some offer direct deposit now too. Some plants with a good front office will still give you a check before you drive away, but those days are likely about gone and besides the virus has thrown a big wrench in doing things efficiently. Love to hear about the system in Australia.

Your point about many getting more bullish the higher the price is common. To some extent we all get in that mindset. But of course it should be the other way around. Higher prices=less bullish.
Countering that is the fact that history shows the good, profitable years are not too common. So, it can set a guy up for a while if you can capture some gravy in a 2 in 10 year. You really don't want to miss out on the whole run up. If the actual grain is gone, there is the futures and options for re-owning. Some are buying price insurance but I haven't done any research myself; more common with cattle I think.

As far as the charts and drawing lines, angles , arcs, fans, forks, circles, spirals, wedges, waves and curves well it can get confusing. And when prices break out of a trend you need to throw a lot of indicators aside. They quit working. The ones left are not as precise and the first thing they will tell you is there is some major volatility on the horizon.

Fundamentals are the final piece of the puzzle many times. Speculation is one of the first pieces. So what actually and eventually turns out to be the final chapter is not known till you get there.

Talking wheat, right now looking at forecasts, ending stocks and the like to me does not provide a clear picture as to why prices are going higher; the charts show close to six year highs in the Chicago wheat pit on the weekly nearby chart.
Latest numbers show major exporters will rebuild stocks (Australia) and keep world exports level with last year.
So, right now in part it is importers increasing stocks because of covid and also speculation.
I do not think the speculators are done. There is more M2 money in the world then there ever has been.
Eventually fundamentals will decide but speculation bats first

[Guest]

Its hard to get excited about selling when the elevator puts you off on a new contract because they haven't got September deliveries cleaned up...

The fact that in this area there is limited spot delivery, that for some guys is a good enough price to pay some bills since they maybe don't have land or equipment payments.

No spot delivery is tough to convince me that the market is working for full value...and I do not enjoy hauling a delayed contract late only to find spot is a better price ...I like spot delivery and price...if i see good weather...I am a fair weather farmer as my rep once told me....

Currently I think backlogging can help the graincos keep the price lower....the graincos thanks to Townend thinks there was a big crop....

When the contracts are cleaned up and everyone is reasonable current thats when the marketing reps will have to do their jobs and so will the markets ...those winter trains maybe harder to fill than the graincos think...


And I think the carryover next July will be smaller than most think...there will be empty bins by march.

My thoughts ...

she's fk-n flat out around , sell anything you want , haul within a week
there was no carry over , zero ..... was a bullshit story to get cheap grain

[Rareearth]

I also like to hear the Ausi, on the farm thoughts.
Similar thoughts here, with many fundamental differences - perspectives . It used to be the big traders had arbitrage/ multi origin opportunities buying from the most vulnerable, uninformed, or other influencing factors (supply, currency, ocean freight etc). With the internet more info is available faster to every one. Now the biggies will rely on satellite and producer information to trade markets to keep profit opportunities maximized.

[farmaholic]

O we're selling alright. Deliveries to licensed facilities are 21.3% ahead of last year at this time. And last year was the best start to deliveries in the last 10. So, like ever.
And it's priced too. Most big graincos will be contracted. Smaller places like feedlots will likely have a quote recorded in a notebook or price is displayed on the wall. Some offer direct deposit now too. Some plants with a good front office will still give you a check before you drive away, but those days are likely about gone and besides the virus has thrown a big wrench in doing things efficiently. Love to hear about the system in Australia.

Your point about many getting more bullish the higher the price is common. To some extent we all get in that mindset. But of course it should be the other way around. Higher prices=less bullish.
Countering that is the fact that history shows the good, profitable years are not too common. So, it can set a guy up for a while if you can capture some gravy in a 2 in 10 year. You really don't want to miss out on the whole run up. If the actual grain is gone, there is the futures and options for re-owning. Some are buying price insurance but I haven't done any research myself; more common with cattle I think.

As far as the charts and drawing lines, angles , arcs, fans, forks, circles, spirals, wedges, waves and curves well it can get confusing. And when prices break out of a trend you need to throw a lot of indicators aside. They quit working. The ones left are not as precise and the first thing they will tell you is there is some major volatility on the horizon.

Fundamentals are the final piece of the puzzle many times. Speculation is one of the first pieces. So what actually and eventually turns out to be the final chapter is not known till you get there.

Talking wheat, right now looking at forecasts, ending stocks and the like to me does not provide a clear picture as to why prices are going higher; the charts show close to six year highs in the Chicago wheat pit on the weekly nearby chart.
Latest numbers show major exporters will rebuild stocks (Australia) and keep world exports level with last year.
So, right now in part it is importers increasing stocks because of covid and also speculation.
I do not think the speculators are done. There is more M2 money in the world then there ever has been.
Eventually fundamentals will decide but speculation bats first

In layman's terms.

Thank you.

[malleefarmer]

Hedge funds speculators etc how long are they?

And when they take profit will it just be a blip?

Will they re establish a position?

What’s the mindset of funds at moment guess that’s a impossible question to answer

And is it mostly beans and corn there most active in?

What’s the Baltic dry index doing that’s a barometer at times Larry if he’s reading this would know that.

[errolanderson]

Hedge funds speculators etc how long are they?

And when they take profit will it just be a blip?

Will they re establish a position?

What’s the mindset of funds at moment guess that’s a impossible question to answer

And is it mostly beans and corn there most active in?

What’s the Baltic dry index doing that’s a barometer at times Larry if he’s reading this would know that.

When markets are straining to the upside or downside, we start to watch open interest as a heads-up indicator of a sudden price change. It doesn’t matter how bullish or bearish a commodity market is; should the funds bail positions en-mass, prices peak or bottom. Grains are raging and cattle are plunging right now, both a watch on open interest right now (IMO).

[errolanderson]

When markets are straining to the upside or downside, we start to watch open interest as a heads-up indicator of a sudden price change. It doesn’t matter how bullish or bearish a commodity market is; should the funds bail positions en-mass, prices peak or bottom. Grains are raging and cattle are plunging right now, both a watch on open interest right now (IMO).

Just an added note . . . . fundamentals start a change in price trend ie: China buying, but technicals tend to end it (fund liquidation) or in this rally, the word ‘cancel’ from China. The sky isn’t the limit in any commodity rally.