Possibly a Drop in the Futures Contracts December 2012 CBOT Corn Price ?

[kanellop]

Hello Again to All.

Exist something the last 2-3 Days that can not bring me to be calm.

That is relative with an E-Mail that got from the RJO Futures were i am client.

Every 2 Weeks send to their clients without any fee,

the RJO Futures eView newsletter.

The last of them,

inside had some Comments from Mr Stephen Davis,

RJO Futures Senior Commodities Broker.

These Comments was:

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07/24/2012 11:55am CDT

The grain markets have been plagued by additional liquidation overnight, despite lower crop conditions and yield implications. The technical patterns left from Monday’s sell off are bearish, especially with the funds huge net long positions in soy and wheat.

Are the highs in? Personally, I have to say that is a nice contract high in CZ12 at $800. We were short for clients and had stops in at 801 and the market did not go and get our stops Sunday night. Can you believe that? A more prudent and professional answer is that the drought of 2012 is not going to end with one pattern of rain. The Corn Belt needs rain in a more normal pattern each week to break this year’s drought. This summer drought market patterns clearly show the first unilateral price realignment phase and this now gives way to extreme volatility into late summer and fall as crop sizes are fine tuned this year. There will be massive crop size idea changes that loom ahead with unprecedented deterioration to the crop. SX12 went and filled the first gap at 1568 and the next gap target is 1493. CZ12 filled the first gap at 749 and the next gap target is 685. The corn and soybean market are very good at filling these gaps.

We just want to mention what opportunity this drought of 2012 presents itself for the future. High prices are the best fertilizer and if you can stomach the volatility that lies ahead there will be genuine grand opportunities. It is not so much what methodology you use .The psychology is very important. Find a broker you can work with and trust and someone who will be there for you every step of the way.

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These Comments had affect me tremendous.

Also, because in the Futures Contracts December 2012 CBOT Corn,

exist a Price Gap that exist in the Area of:

6.76 USD - 6.855 USD.

"Smell" something to me in the Futures Contracts December 2012 CBOT Corn.

I have an internal feeling that will happen the following:

That Price Gap possibly will be filled with an EPA Statement,

that will change the Ethanol Mandate Blending,

maybe before the 10th August 2012 USDA WASDE Report,

or

in the 10th August 2012 USDA WASDE Report,

will announce together a change in the Ethanol Mandate Blending.

I do not see the Weather as motive to filled that Price Gap.

I do not know,

if anyone here can make any Comment/s relative to my thoughts...

Kind Regards,

George Kanellopoulos.

 

[Ckessler]

Whoever wrote you that letter has nice hindsight trading skills. I bought at corn 500 and sold at 800 by the way, so you should go ahead and invest with me instead.


Anyway, your price targets and rational for whatever trade your thinking of executing are completely emotional. About 4 (admittedly steep) down days after a 40%ish price rocket and you're thinking about selling...


If your emotions are screaming "sell sell sell" the bottom is probably in. When the taxi cab driver told you "this is the worst drought in the history of mankind! Corn/Soy has nowhere to go but up!" go ahead and chalk that up as the high.


For the record, I was short SU12 @ 1692 and I put in a profit lock-stop that got hit at 1680.25. Had a stiff drink that night. Watching developments but my crystal ball says long around monday.. GL

 

[oldtime]

I agree, weather is no longer a factor for Dec corn, too late for that. If the big funds took their profit, then all we are left with is real corn that real buyers have to decide what they will pay for it.