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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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From: Square_Dealings10/16/2004 12:58:55 PM
   of 110194
 
I am reconsidering my take on the grains and commercial positions.

Commercials (i believe in this case are the grain dealers) have reached a 5 year record long position on all three beans, wheat, corn since the 9/7/04 (COT report). Since this time the price of grains has gone pretty much straight down.

So it seems the supply is exceeding the demand.

And if you are China and you are planning to let your currency rise against the dollar then why not hold off and buy what you need later, after the dollar is lower? Meanwhile other countries have better prices like Brazil.

And I think its harvest time so there must be more grain coming in short term than can be sold. Not so sure how this plays out although there looks to be some bottoming action in corn and maybe wheat. Maybe the bottom rounds out as the dollar falls and the delayed buying comes back in.

So long grains is probably a play on U.S. dollar devaluation.
Maybe gold or currencies are as good or better in that case?

M
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