Just saw an interesting Elliott Wave chart of the Beans that is suggesting that they are about to go into Primary Wave 3, which if true, would no doubt take out the $10.80 highs of 2004 sometime next year, and in doing so, most likely surpass the All-Time highs of $13.00 back in 1973. Could wind-up being a great option play sometime next year. Stay tuned.
Apex, you must be taking a long term view on this. I agree, and buying strategies after Christmas could reap mega rewards come August and September. Grains might finaly catch up with the rest of commodities. For now, though, they are low low low. Just look at Corn. But Corn can't go under 1.80 bu. Below that, the government has to start bailing out farmers big time. The again, never say never.
Corn looks absolutely horrible. It will most likely be the laggard of all of the grains in any rallies. Yes, I am taking a long-term look at this. Basically looking at some out-of-the-money calls on Nov. '06 Beans sometime during Q1 of 2006. Right now, today's action argues for a test of the late Sept/early Oct lows. But once back above the $6.20 mark, things could get interesting. Stay tuned, cause this could be the trade of 2006.
Beans in the Teens???-------If you believe that, you should be focusing on the July & August 2006 contracts. They'll give you more "bang" than November. Wait until the end of March before loading up on the July-10 dollar-calls. I hope you're right.
I hear ya! Hopefully we will see a lot of premium erosion between now and then . . . July $10 Calls are currently 1'2 July $8 Calls are 4'6 Sep $8 Calls are 8'0 Nov $8 Calls are 9'0
Grains are indeed mkts where the fundamentals do count. But in the same breath positions are technically oriented when entering. If i was (i used to) to trade the S, C, W, it would be a position and not day trades. Grains outlook is flat out bearish, the KEY number to look at is ending stocks. In grains the supply is no mystery, supply relative to ending stocks gives a clear picture of demand during the past year. So the "UNKNOWN" is the upcoming growing season. Will it rain or hot, hot as heck in the corn belt, who knows......NO ONE. These days the seasonals are not as easy as they used to be because Brazil is a major producer od beans and the growing seasons are opposite. To say a option for whatever time will do this or that is a pure gamble. beans in the teens is cute but has about as much value as the weather forecast of the traders on the floor of CBOT, "if they look out the window and it is raining, they SELL"....HA Asked a farmer once as a fun coffee talk, ( a real one, really, HA) Will beans be over $10 this year? HE said sure, for 2 bushels..... That was a few years ago, not now.
Right now, the Bird Flu is obviously affecting imports of beans by China. Lots of imports are on hold. Meanwhile, the South American bean crop is receiving nice rainfall amounts and is on track for great yields. Here in the U.S., more acreage is seeing bean planting vs last year in which wheat was being planted. Thus, the market is trading accordingly ( BEARISH ). Stay tuned.