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cropsey, il 61731 | While they usually are a pretty good indicator for timing sales some funny things have happened this past year. We had a sell signal in the fall when the local price was around $3.25 and the comment from Roach was to use it to catch up on sales especially if none had been made. I would guess most sold some corn at that point. Fast forward to late December - no sell signal and corn is $3.80 cash and around $4 for fall. My contact with Roach mentioned that the price was still pretty good and that later sell signals could still occur at lower price levels (Roach did hit a sell signal just before the report though). I sold pretty heavy for tax purposes and continued to sell into the new year and I'm now happy with the choice - normally I was guaranteeing a good report and $5 corn the second I sold the last kernal in storage.
It seems like we are all a little in 'no mans land' on achieving the best flat price. The sells signals still work if you are just a technical trader/speculator - it's the difference in price that counts to them, we want more price (er... mo money). Still selling something at each sell signal should give an average of the best prices available - the trick would be to decide which signal was too low and which signal to sell heavily into.
For example:
We tank the market now and later this winter there is an uptrend and we get a sell signal at $3.55
Market retreats until July and then we get another signal (15% eth rumors) at $3.45
15% eth doesn't happen and the market tanks
Funds rebalance (or something) in sept and we get a sell signal around $2.95 and then the market chops lower the rest of the year.
The 'smart guys' sold early - but how would you know. The smart guys become idiots if 15% eth (or similar event) comes true and we bump up to $4.55 in July and maintain a $4 average the rest of the year.
There appears to be plenty of corn on the market and we are not constricting supply buy not selling right now. Perhaps tight bins might have more effect later, but it's still a big crop even if the usda is a little high. The effects on animal ag are slowly showing up (cattle already small, hogs winding down - decisions made a year ago or more will be complete this summer) and demand will be less. Does 15% eth eat that up? I don't know - but we are no longer in a we've got corn and you want corn market.
One more thing, isn't this the time we pay interest on operating money and stay on the marketing sidelines - separating cash flow needs and marketing decisions? Maybe there is opportunity to capture some basis gain if it falls apart, but it would seem we should go back to arguing about Obama, Favre, Bush, Heli Ben, Okey and agtrader (all somehow tied to the marketing page).
Thanks,
Pat | |
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Advisors say sell, sell, sell. So HOLD?
