Mohan,
<Good time to short corn>
I am absolutely the wrong guy to ask about this. I gave up commodity trading about a decade ago after several significant miscalculations. If the individual investor is the shock absorber in the stock market, he is road kill in the commodities market. I'm sure there is some small time player that's made millions on heating oil futures out there, I just haven't met em yet!
I don't feel there is an immediate downside risk to the corn market because everybody around here has had a pretty good year and if they sell much more they will have to anty up more taxes; so the bigger sales are likely to come early next year, and it would be my guess that's where the market would be weak. I'm amazed at how many producers have bought into this myth of foreign sales. There is much greater elasticity to the demand for corn than people are calculating, and the expensive dollar is pricing us out of many export markets. A guy would have better luck convincing some of those stuborn bulls over on the AMAT thread to buy puts on AMAT than convincing these producers to buy puts on their corn. When we observe the majority of people certain that an outcome is assured, such an outcome has a lot more correction potential!
I've observed the same thinking with interest rates lately. A gentleman I work with got one of those $10,000 plastic cards in the mail, and in short time he and the wife had remodeled and bought a hot tub and needed more. He was at the bank last week to get the details on home equity loans. The loan officer told him to start the paper work but to wait as long as possible to make the loan because interest rates are most certainly going down. So far the loan officer has been right; and if we see deflation without a currency crisis he will continue to be right, but when it gets to everybody making their business plans on falling rates and everybody having an adjustable rate note, any change is going to be an earthquake!
What's your FA on this currency business Mohan?
'preciate your toughts,
best, art |
