April 2, 2024

 Corn down 16 cents to start the week…

and more or less has rejected last Thursday’s

supposedly “bullish” USDA report

I have been bearish Corn for 2 years now…Throughout that time, I have watched virtually the entire agricultural analysts community preach a non-stop bullish case for this market, even though, with the exception of two very brief bogus weather rallies last June and July (each lasting maybe 6-8 days), Corn has done nothing but trend lower since May, 2022…And as I have continued to note, this industry wide erroneously bullish press has induced farmers to hold, and hold, and hold their crops as they wait for this mystical big rally that analysts kept predicting…to the extent that right now, FARMERS ARE STILL HOLDING 61% OF THE USA’S CORN CROP FROM LAST FALL…which, to me, is just a mindbogglingly enormous number…And simply stated, REPRESENTS NOTHING LESS, I BELIEVE, THAN AN ABSOLUTE AVALANCHE OF SELL ORDERS THAT WILL BE HITTING THE MARKETS BETWEEN NOW AND SUMMER’S END…which is when the bins will need to be emptied to make room for this year’s crop as it is harvested.

Originally, thanks to ag analysts, farmers  were waiting for $7.00 to sell…and when that rally never came, it was $6.00, which also didn’t happen…and then it was $5.00…And now? Here we are at $4.25 with all of those same analysts STILL calling for a bottom in Corn, with their endlessly bullish “logic” having been further bolstered by last Thursday’s USDA report that projected 2024 Corn acreage to be even lower than “analyst’s expectations,” thereby all but confirming in their minds that, “ Now we know. Even lower acreage than we thought! The bottom must have been made!” And, with that supposition, Corn DID rally 20 cents immediately after the report…BUT…Here we are two days later…and Corn has given back ALL of the rally…and then some…And now, I believe, looks poised to absolutely bust through the lows and begin to induce the massive farmer selling that I think HAS TO BE COMING…

If this “bullish” report couldn’t hold up for even one day, is there some new “reason” in the wings to suggest a rally from here? I doubt it. As I’ve repeatedly stated: End users have no reason or urgency to be buying here. But farmers are in a different situation. Sooner, rather than later, they HAVE  to sell. And having seen this script too many times to count, my very definite expectation is that they will soon be doing that…and pretty much, all at the same time.

MARKETS ALWAYS GO MUCH, MUCH FURTHER THAN ANYONE EVER THINKS POSSIBLE…And where my opinion for months on end has been that we’d see at least $3.75,  I NOW THINK THE TARGET IS MORE LIKE $3.25…I THEREFORE CONTINUE TO RECOMMEND, EVEN MORE LOUDLY, BEING SHORT CORN…RIGHT HERE. RIGHT NOW.

This, I believe, is a great put option…I am actually surprised that it is this cheap…or so it seems to me…

The trade above is my basic recommendation…but if you want more leverage, or want to do the 430’s but add some punch to the position, the two following options are worth considering…

This is a stupid statement but what I always do here is try to show you, and tell you, what I am thinking/doing for myself…and my stupid thought here is that this just looks OBVIOUS. While this certainly does not mean I will be right, and if I am not, it does mean losing money…but that IS my perspective in this trade.

WHEN WE’RE AT THE BOTTOM, THERE WON’T BE AN ANALYST WITHIN 1000 MILES OF CHICAGO OR NEW YORK CALLING FOR IT. My two cent opinion anyway.

Call me if you want to get on this…OR…any of the other trades I’m doing that appear to be working and/or moving.

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