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| Does the market make any sense fundimentally? The world wide supply/demand situation seems to change with the news cycle and we have plenty of grain here with what looks to be an more than adequate crop coming this fall. Yet prices keep working higher and it might not be long before I will sell some offered corn for $3.90 and $3.99 (jan delivery, local basis). It's above my break even, and given this 'gift' am I wrong to accept it? Could it march right up to $5 - maybe on a technician's chart, but unless reality changes there should be a pretty good correction coming. The problem is 'reality' could change, especially in this realitively unsettled time of coming out of a ressession.
My advice - if it's above your break even, make some sales. It's always possible the market will follow djm/markwright's more positive predictions and agtrader has yet to call things toast (usually a leg up point), so we could all look like idiots having sold $4 corn when it was obviously going to $6. Being on the hog side of things also, I can't help but think end users are not going to be overly supportive of really high corn prices. Most have locked in some pretty attractive prices available earlier, but it will run out at some point. Meats and ethanal could march higher to accomodate the higher grain prices, but we don't have an overly rich consumer base to absorb that higher price yet.
On the other hand, policy could be working to pretty much move the end user out (with possibly the exception of ethanol). I could think really dark and assume that what's going on is actually geared at moving all meat production off shore in which case grains will just do what they want to achieve the 'political goal' of special interests. I'm not sure that selling high priced grain to another country for feed so they can sell meat back to us works very long though - the pound of meat is tied to the cost of the feed at some point. However, elections are coming, people are wising up to the nonsense of special interests (hsus has nothing to do with humane) and all this could be the effects of media hype on my head.
Thanks,
Pat | |
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any thought on next weeks market?
