Croker-Rhyne Co., Inc.

Main Page  |   Philosophy  |  Current Recommendations  |  Newsletter Archives
Contact Us

October 22, 2012

BUY COTTON. SHORT CORN. SHORT SOYBEAN MEAL.


Cotton and Corn are two distinctly different commodities. Cotton is priced in cents per pound. Corn is priced in cents per bushel. Cotton is primarily grown for textile use. Corn is primarily grown for feed…However, they are both planted in spring and harvested in the fall.

Seemingly all the research  I see written about Cotton is ultra bearish, with seemingly everything I see written about Corn is exactly the opposite, that is, ultra bullish.

As I have stated in recent newsletters, I think all those Cotton bears and Corn bulls have (quite typically) got it absolutely  backwards.

To me, the chart following is almost all you need to see…

10-22-12CottonvsCorn1.png

At current prices, it is unprofitable to plant Cotton, while it is extremely profitable to plant Corn or Soybeans. In general, what do you think farmers here, and around the world, will end up planting? And what is the most likely price result if they do…?

I had a wise old farmer say today, “Common sense says this corn can’t stay up here”.

Common sense…Isn’t that what it comes down to in the end?

I MAY BE THE LONE WOLF WHO HAS IT ALL BACKWARDS, WHICH, IF SO, WILL MEAN LOSING MONEY, BUT I SPEND EVERY DAY NOW TRYING TO BUY CALLS IN COTTON AND PUTS IN CORN (AND PUTS IN SOYBEAN MEAL).

BUY COTTON. SHORT CORN. SHORT SOYBEAN MEAL.

Check out the rest of what I have posted here. Then give me a call if you this makes sense…and if you have RISK capital you are willing to put on the table.

10-22-12cottonvsmeal.png

Three options I like at current levels…

10-22-12march13cotton.png

10-22-12march13corn.png

10-22-12march13meal.png

I’ll end this by just copying the long term charts from a recent newsletter…but first I ask you to do the following:

Determine which, if any, of my “targets” seem reasonable….then DO THE MATH YOURSELF…

What happens if I am wrong on all three markets? Easy. You can lose 100% of what you have spent.

What happens if I am right on one, wrong on two? Easy. Do the numbers.

What happens if I am right on two, wrong on one?

What happens if I am moderately right on all three?

Again, just do the math.

I MAY BE DEAD WRONG, WHICH COULD MEAN LOSING WHATEVER YOU INVEST, BUT I ABSOLUTELY, TOTALLY, UNEQUIVOCALLY LOVE THIS “PORTFOLIO”. I THINK IT IS SMART AND HAS BIG POTENTIAL.

Again…these next 3 charts are from my October 15th newsletter…

10-15-12cottonmonthly.png

10-15-12cornmonthly.png

And in the soybean complex…

10-15-12soymealmontly.png

Thanks….Give me a call.

Bill Rhyne

866-578-1001

770-425-7241

The author of this piece currently trades for his own account and has financial interest in the following derivative products mentioned within: Cotton calls, Corn puts, Soybean Meal puts.
 

Main Page   |  Philosophy  |  Current Recommendations  |  Newsletter Archives 
Contact Us