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Corn Crash!
- Thread starter simpleton
- Start date
good trade and good call on all of that. I have a feeling those gaps will get filled, what are you thinking?
Quote from simpleton:
Of course that would work if you believe we are still in a bull market.
I haven't seen any evidence of either i) a bear market or ii) a significant long-term top. There was no buying hysteria, no parabolic blowoff, no pattern of lower highs and lower lows on the long-term chart.
That said, the problems in the stock market do give the potential for a short-term correction in commodities, just as we saw in the January and March panic selloffs. This could easily knock something like corn down 10% in a week. So I have my longs hedged with puts now. I still think the 600-650 range would be a good long-term buy if this selloff happens.
Do you think we are no longer in a bull market? If so, what evidence persuaded you of this?
Quote from Cutten:
I haven't seen any evidence of either i) a bear market or ii) a significant long-term top. There was no buying hysteria, no parabolic blowoff, no pattern of lower highs and lower lows on the long-term chart.
That said, the problems in the stock market do give the potential for a short-term correction in commodities, just as we saw in the January and March panic selloffs. This could easily knock something like corn down 10% in a week. So I have my longs hedged with puts now. I still think the 600-650 range would be a good long-term buy if this selloff happens.
Do you think we are no longer in a bull market? If so, what evidence persuaded you of this?
To be honest, if I think too hard about how one market correlates with another I screw up my trading. Just taking a look at the chart I posted is enough to convince me to risk my money that a top has been made in corn. I'm not saying that we'll return to 300 but even a 30% retracement would be a big money maker from the short side. In order to generate 100%+ returns a year, I try to identify markets that will make a large move quickly. And my method is to always scale in, so in trending markets I tend to make less unless the trend persists for some time. If I'm trying to pick tops or bottoms, it gives me the opportunity to accumulate a decent size position before the anticipated move.
Quote from Bingoking:
Have you ever noticed there is a different excuse every day of why the grain markets did what they did that day?
Waaaay too many factors affecting these markets to come to a hard and fast conclusion that it will do this or it will do that.
That's with every market isn't it? I missed today's dump in corn. oh well.
Do you guys think they are pricing in future increase that appear to be coming down the road in fertilizer, insurance, etc.?
http://www.agweb.com/get_article.aspx?pageid=144246
Economist: Dramatic Cost Increases Coming in 2009
7/15/2008
AgWeb.com Editors
Significantly higher production costs in 2009 are facing Illinois corn and soybean farmers, according to a University of Illinois Extension study.
Cost increases will lead to higher breakeven prices for both corn and soybeans, according to Gary D. Schnitkey, U of I Extension farm financial management specialist. The higher input costs will cause farmers to examine how much to adjust cash rent bids and will also influence marketing and crop insurance decisions.
The cost increases were projected for central Illinois farms having high-productivity farmland. For corn, non-land production costs for 2009 are projected at $529 per acre, a $141 per acre increase from 2008 levels of $388 per acre. Between 2003 and 2007, non-land production costs averaged $286 per acre. Production costs for 2009 are projected to be $243 per acre higher than the 2003-07 average, an increase of 85 percent.
For soybeans, non-land production costs for 2009 are projected at $321 per acre, up by $82 over 2008 costs of $239 per acre. Between 2003 and 2007, non-land costs for soybeans averaged $180 per acre. Productions costs for 2009 are projected to be $4141 higher than 2003-07 levels, an increase of 78 percent.
"Fertilizer is the input with the large cost increase," Schnitkey said. "For corn, fertilizer costs in 2009 are projected at $215 per acre, an increase of $97 per acre over the 2008 projected level of $118 per acre.
"For soybeans, fertilizer costs in 2009 are projected at $98 per acre, a $53 increase over the 2008 level of $45 per acre."
He noted that projected 2009 fertilizer prices are significantly above fertilizer prices in recent years. Besides fertilizer, seed costs are projected to increase, Schnitkey said. Also up in the 2009 projections are insurance and power costs.
Based on yield expectations of 191 bushels per acre, the 2009 breakeven price for corn is $3.82 per bushel while the soybean breakeven price is $9.65 per bushel, both of which are significantly higher than historic commodity prices, Schnitkey said. Corn, for example, averaged close to $2.40 per bushel between the mid-1970s to the middle 2000s. Large income losses would occur if commodity prices returned to historical averages, he said
http://www.agweb.com/get_article.aspx?pageid=144246
Economist: Dramatic Cost Increases Coming in 2009
7/15/2008
AgWeb.com Editors
Significantly higher production costs in 2009 are facing Illinois corn and soybean farmers, according to a University of Illinois Extension study.
Cost increases will lead to higher breakeven prices for both corn and soybeans, according to Gary D. Schnitkey, U of I Extension farm financial management specialist. The higher input costs will cause farmers to examine how much to adjust cash rent bids and will also influence marketing and crop insurance decisions.
The cost increases were projected for central Illinois farms having high-productivity farmland. For corn, non-land production costs for 2009 are projected at $529 per acre, a $141 per acre increase from 2008 levels of $388 per acre. Between 2003 and 2007, non-land production costs averaged $286 per acre. Production costs for 2009 are projected to be $243 per acre higher than the 2003-07 average, an increase of 85 percent.
For soybeans, non-land production costs for 2009 are projected at $321 per acre, up by $82 over 2008 costs of $239 per acre. Between 2003 and 2007, non-land costs for soybeans averaged $180 per acre. Productions costs for 2009 are projected to be $4141 higher than 2003-07 levels, an increase of 78 percent.
"Fertilizer is the input with the large cost increase," Schnitkey said. "For corn, fertilizer costs in 2009 are projected at $215 per acre, an increase of $97 per acre over the 2008 projected level of $118 per acre.
"For soybeans, fertilizer costs in 2009 are projected at $98 per acre, a $53 increase over the 2008 level of $45 per acre."
He noted that projected 2009 fertilizer prices are significantly above fertilizer prices in recent years. Besides fertilizer, seed costs are projected to increase, Schnitkey said. Also up in the 2009 projections are insurance and power costs.
Based on yield expectations of 191 bushels per acre, the 2009 breakeven price for corn is $3.82 per bushel while the soybean breakeven price is $9.65 per bushel, both of which are significantly higher than historic commodity prices, Schnitkey said. Corn, for example, averaged close to $2.40 per bushel between the mid-1970s to the middle 2000s. Large income losses would occur if commodity prices returned to historical averages, he said