I like being long SN, especially on a 20 cent break from 940 to the old resistance level at 920. 950 and 975 are good targets to sell into on the first bounce up there. As July gets ready to expire, we should see a lot of significant price development, with less static noise and choppy trade. Old crop beans should be bought on dips. However, you need to have stop limits beneath every buy order. If I am right, and we get another 75 to 150 cent rally, just move up your trailing stops. Beans are made in August. Its the middle of July. Six weeks is a long time. 30 trading days. Anything can happen, and we are due for weather fireworks of some sort.
Where is Tom Skilling with his “Dome of Death” (The Heat Dome).. Do you really think we’ll have a summer where he doesn’t get to say that phrase at least once or twice? When he does, you need to be long prior to him saying it. Then as we spike off of that weather, use it to lighten the load and take profits.
CZ, new crop corn, needs to break above the 400 level. If we can do that, 422 and then 434should be attainable. I am not so sure about 450 corn, however. To get there, we’d have to have yields drop precipitously. Bottom line, the corn that looks good is super. The bad stuff, like every growing year, looks bad. The farmer expects prices to mirror his personal crop. Farmers sitting in hot and dry, are going to hold out until those boys in Chicago wake up. Farmers with large beautiful crops, are going to be there every dime with some bushels to sell. Don’t get caught in the game of musical chairs. Sell the grain, and take 20 cents to re own corn and 30 cents to re own beans.
I still like being long high protein wheat. Funds are either slightly long or still quite short. Either case supports potentially higher prices. At some point, shorts will have to capitulate. And the new longs will keep putting out high balls, searching for stops on a “rally that makes no sense”… To quote a couple of people I have heard talking about the 80 cent pop in wheat over the past several weeks.
Stop worrying about why it does or does not make sense, and just go with what the Market is giving you. Some of us would rather be “right” than make dough. Just remember what we are doing here. Bottom line, while we may have some dips coming, to shake out the weak longs, I am in the opinion that those dips are buying opportunities. Let everyone else figure out the nuts and bolts of “why” the market is doing what its doing.
Use your stops, be consistent and disciplined.
Quickly on the Stock indexes, I want to be a seller of the Dow the first time we get to the 10500 level in cash. If you’ve been reading this blog, I’ve been bullish since 9700 level, just before the July 4th weekend. 10,400-500 is an area to lighten the load, take profits, and look and see the tone of the earnings. I also believe, if BP can cap this well soon, we will get a sympathy rally. That will be a rally to fade.
Good Trading
Good Trading
