Looks like my idea that farmers were capitulating was correct. The USDA came out extremely bullish here today for corn. Expecting 88 to 90 million acres, instead, we got 87.8. We lost one million acres of corn. Opened higher today, and has danced around limit bid (+30) cents all day. This is looking like a sea change. We moved all the way back to our 2007 lows in the Dec 2010 contract. Made a new contract low,
frightened producers into what are shaping up to be sales in the proverbial hole.
Rest assured, its a good time to re-own sold bushels. A 15 cent investment in some good calls out in Dec could yield a healthy profit. In short, I want to be long corn on dips now.
We will have to get through the weather issues, for sure, but my bias has certainly been reinforced on the bullish side for corn.
As for the Stock Indexes, Dow Jones Cash still has support at 9800. I like buying dips against that number. Remember, to be profitable, you have to be bullish when the commentators on CNBC are looking suicidal. Its scary, and counter intuitive, but successful trading often runs counter to what looks good, or very often what feels good.
Otherwise, we’d all be making 200 percent a year on our investments. Unfortunately, the markets are driven by emotions.
So… buy corn on dips, buy the Dow on pullbacks to 9800. Risk 8 to 13 cents on corn specs, and 150 to 220 pts on Dow pullbacks.
Good Trading
