February 2, 2024

Recipe for Farmer Disaster

New Low Close (again)

With farmers STILL holding on to RECORD unsold Corn for this time of year, as well as also STILL holding massive stocks of unsold Soybeans…all of them waiting for some sort of miraculous rally to sell their crop into…I believe today’s dead low closes in Corn and Soybeans have sent the odds sky high that next week is when these markets stop drifting lower…and absolutely fall off a cliff. Maybe I am dead wrong, but I cannot imagine that there are ANY end users (buyers) out there doing anything other than just sitting on their hands, watching the markets make new lows. But as for farmers? They MUST be getting more and more anxious about selling as week after week they have watched big dollars evaporate in the bins…AND…unless this there IS some  sort of miracle that saves all those guys, who, I’m sorry to say, have been duped by bullish ag analysts into not selling, the next thing that I think OBVIOUSLY happens is that panicked producer selling gets cranked up big time…And yeah, as I’ve repeated over and over, when this farmer capitulation does become a reality (inevitable in my opinion), I see these two markets dropping straight down 20-25% in value over the ensuing 4-6 weeks.

 I continue to recommend getting short both Corn and Soybeans.

It is entirely possible that SOME healthy percentage of farmers will see today’s new low close, and over the weekend make the decision to do some selling when the market’s reopen…which may lead to Sunday night’s open (at 8:00 PM EST) being a gap lower, meaning these option prices would be a bit higher…Beyond that, I think it will be QUITE interesting to see where these markets may already be by Monday morning…and I certainly do not know but I DO think there is the definite possibility of prices being sharply lower…So if you want to do something with this, feel free to contact me Sunday night.

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: Corn, Soybeans