Great Grain Robbery II, Some Perspective

[TechAnalyst]

If we are in the midst of a second great grain robbery, we should look back 50 years to see what happened to gain some insight into what might lie ahead.

In the decade up to it, corn was trading in a range from $1 to $1.60/bu. By mid 1973 it topped out just over $4.

Wheat had been in a range of $1.20 to $2.20/bu. It ran up to $6.50/bu in reaction.

Soybeans traded between $2 and $4/bu prior to, topping out over $13/bu following.

The fact that those highs were seen almost 50 years ago puts it into perspective what could happen in today's inflated terms.

I point this out not to suggest we will see significant new record highs but to highlight the risks of being short one way or another.

Call option strategies may be worth considering if short. They may be expensive but unlimited risk could be worse.

Just a thought...

[bigzee]

Yes prices are better, but are far from what they should be. Consider the cost of whatever it takes to operate a farm and see if these prices are high enough. Yes canola is high, but how many bu are realistically left in bins? Staple crops like wheat and durum are no where what they should be.
Really at the end of the day how much more are really making with escalating prices of everything else?
Machinery companies and stealerships never care what we get for a commodity prices, their prices keep going up. I can guarantee they are watching closely to what markets are doing now. Just watch prices go through the roof.

[TechAnalyst]

I should make sure my point was clear.

I am not suggesting prices will reach levels of 2 to 3 times the previous record highs but I am suggesting it can't be ruled out, especially if the new crop is hit with adverse conditions.

Risk managers in particular should consider the possibility.

[GALAXIE500]

If it don't rain out here soon there will be no grain to rob !

Yep , it is pretty hard to brag about high grain prices when your bins are empty and the temps are 95 degrees for days on end with a southwest wind. LOL !!

[blackpowder]

I'm as much or more interested in the downturn timing and severity as the peak prediction.
Same thing I suppose.

[TechAnalyst]

Spike tops are basically impossible to predict, only identified in the rear view mirror.

For what it's worth, at this point I see nothing to suggest a top is imminent.