Still long, have moved my stops up on 1/3. Took profits on another 1/3. Looking to exit at 555 and turn around and go short at that level.
In the Dow Cash, waiting for a flush tomorrow down to 10873 to cover shorts. I want to get long if the Dow trades down to 10700.
Once again, we have been spun around by Chinese comments. When they need a rally, they talk of importing corn from Argentina. When they want a break, they talk about arresting speculators in their country and raising reserve requirements.
These Chinese, with all their Communist Training, are better Capitalists than anyone gives them credit for.
If and when they announce they will be importing corn, and begin doing real verifiable imports, they will be paying for their cash corn with their profits from their futures positions.
If the USA or some European country, (Other than the former Soviet Union), was engaging in this strategy, there would be a tremendous hew and cry about robber barons and despicable greed.
However, China gets a pass. For now.
I am going to go out on a limb and make a prediction that this type of market action could be the catalyst for some unforeseen protectionist measures from the West towards the East.
As food gets more expensive, it benefits the producers. If food gets more expensive and you add in scarcity…(Something we have never seen in the history of North America) things could get interesting and dicey.
I am not saying its going to happen. I was just thinking about worst case scenarios and what that would mean politically and economically.
Most people are busy fighting the last war. We have potential problems such as the one I just outlined. No one in America is discussing what happens if we have food inflation. No one is talking about what happens if we have a true drought. We have not had one since 1988. What happens if we really have water issues? Bottom line, there is a very bullish story for grains if any of these things comes to fruition.
Good trading.
