January 16, 2024

 My observation:

Markets always go further than anyone ever expects…

And these two Bear Markets are FAR from over….

I got a call from a farmer yesterday telling me he had yet to sell any of his recently harvested Corn, and asking, “What should I do here? I have been waiting for a rally and it hasn’t happened.” And that is EXACTLY the scenario I have been repeatedly describing in my newsletters…that pretty much every farmer in this country has been listening to all the ag analysts’ bullish predictions of vigorous rallies in Corn and Soybeans, and have therefore been waiting for higher prices and NOT been getting much selling done in either of these crops…with the reality now being that, SOONER RATHER THAN LATER, THEY HAVE TO SELL…regardless of the fact that prices are steadily falling into newer and newer lows…

I have been saying it and firmly believe it is happening now…that prices are in the early stages of a nosedive wherein there are billions of Corn and Soybean bushels that should have been marketed months ago, but now HAVE TO BE SOLD into a relative VACUUM OF BUYERS…which is the recipe for seeing Corn and/or Soybeans drop 20-30% within a one to two month period…in the same way it has happened over and over an over for the past 50 years.

I CONTINUE TO RECOMMEND BUYING PUTS IN SOYBEANS…AND CONTINUE TO EXPECT TO SEE THEM SOLIDLY UNDER $10.00.

My perception is this “slow motion” $2.00 slide since mid-November is about to accelerate as more and more farmers freak out watching more and more money EVAPORATE in the bins. And again, this is NOT some new story in the history of the commodity markets. I literally cannot count the times I have seen this scenario of an avalanche of farmer selling…which is why I keep banging away on this. GET SHORT NOW. It is NOT too late.

As I have written forever, Corn, Wheat and Soybeans put in major tops in May and June of 2022...In spite of that, the overwhelming majority of agricultural analysts...which ARE the primary source of information for farmers...have provided nothing but ENDLESS bullish press referencing "weather problems" and "when China buys," thus leading farmers to make planting and marketing decisions based on the assumption of nothing but high prices…when the fact is, those markets have been in Bear markets for over 18 months now.

And I am no longer recommending Long Wheat…

One last thought…My perception is that Soybeans have some SERIOUS catching up to do with Corn and Wheat…Although Soybeans have come off $2.00 in the past two months, we have YET to have anything close to any “big” down days that attract more attention…And I think that IS what is immediately ahead here…and maybe I am dead wrong but I fully expect to be posting newsletters soon noting stuff like, “Soybeans closed down 50 cents today,” as my experience suggests that these “slo-mo” declines, that sneak up on farmers before they realize how much the market has moved, almost INEVITABLY turn into MUCH bigger action…where 40-50 days DO become the norm, especially, I would add, in Soybeans.

I urge you to pick up the phone and do something with this. It is NOT “too late.”

Thanks,

Bill

770-425-7241

866-578-1001

All option prices in this newsletter include all fees and commissions. All charts, unless otherwise noted, are by Aspen Graphics and CRB.

The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Soybeans, Corn