The eGrains are the best kept secret in the Markets. They offer a better profitable range and less chop on a daily basis than the indices. Top that off with only being open for less than 4 hours and you have heaven.
I like the grains too but have cut back in this area. I now only focus on the very best trade setups vs. the good. I'm willing to let a bunch of set ups pass me by unless I feel I truly have an edge w/ low risk. I try to focus on really good entry. But The grains can get pretty dang choppy on a intraday basis. I'm looking to take a poke at Corn fr. the short side. Negative fundamentals, negative technicals and tone. I think the recent Crop report will weigh heavily on the market for a while.
Becareful getting short down here, in my opinion its time to buy, then reverse and go short on the coming rally....we'll probably get some warmer temps, and other bullish weather forcasts, and some technical buying from this oversold condition. I'm long some 4.00/4.50 Dec call spreads @ 11cents from 3 weeks ago, but it looks like that position will expire worthless; and i'll have some resting orders to get short around 3.85 (thats about a 50% fib retrace from this current downtrend).
I wasn't clear in my post Smoothie -- I agree w/ what you said. I'm interested in getting short on a bounce off the short term trend. But I believe that the Primary and Intermediate trends have turned lower, which is supported by the fundamentals -- namely the largest expected Corn Crop since WWII. When prices go thru the roof you can usually count on the Farmers to respond. Just look at Sugar. $3.00 and $4.00 Corn is in the upper reaches and usually doesn't last. A reversion to the mean brings Corn back toward $2.00 over time.
Excellent post! Its nice to see others actually understand the concept that commodities are "mean reverting" instruments. Question for anyone on this forum....what sources (websites/tv) do you use to predict (and watch) the 6-10 day forcast? Do you just use local Chicago channels (last i heard; those are broadcasted in the pits on the tv overhead)?
The recent decline in this market has not been caused by farmers and end users. It was caused by the commodity funds. Not saying that the farmers didn't sell into it I know of a lot that did but they are not responsible for almost a dollar slide in the market. It used to be that you pay attention to the comercials in the market because they are the smart ones that actually use the commodity but now the funds are so much bigger you watch what they do because they literally are a fundamental factor in themselves. The funds get this thing built up so much that its like a house of cards when it comes down and it just cleans all the small players out along the way. Wait untill they decide to leave the wheat party! Anyway I think both the bottom and top are in for the year! Although I wouldn't be a bit suprised to see a 30-40 cent pop up soon.
Yeah, but this time it's different..hahaha.. but seriously, much like oil, corn has a new issue complicating it (ethanol) which means that 'mean-reversion' could become irrevlevant for a long time to come. $3.00 corn is the new $2.00 corn. I do believe we could see 2.70 at a maximum move to the downside, especially on decent rains over the next 4 weeks, but I don't think it will last long. It's all a weather game at this point. Nothing else matters. It's hot now, but a good trough coming in. After that it looks dry, dry, dry. But those long out forecasts are apt to change...