Very briefly,
I would want to buy any big dip in front of this number, be it corn, wheat, or beans.
I am especially friendly beans.
I am writing this on Thursday Jan 6th at 4:10 pm.
If you remember last Jan 2010’s number, we broke hard off this number. We then drifted in a dismal sideways range for 5 months. Once farmer’s threw in the towel and got bearish, sold out their grain, most of the corn was sold at 4.00 and 5.00 corn, a lot of beans got sold at 10.00, and we all know how wheat bottomed out below 4.40 and then exploded 4 dollars. we didn’t get that spike until producers threw in the towel.
I think the herd will remember last year and fight last year’s fight. That’s why I would want to be long grain. I think spending 10 or 20 cents a bushel in front of Tuesday’s number for corn and bean calls is best way to limit losses, and potentially take advantage of a large pop to the upside.
If the number is bearish, then, the max you can lose is the premium on the call. if its really bearish and we are limit down for 2 days, I’d rather lose the premium.
Having outright futures position in front of the number is too risky.
So I am bullish, but not stupidly so.
That is all.
