I'm afraid your prediction is only a remote possibility. The Silos, especially after this years harvest, are full of all grains i.e. corn, soybeans and wheat; and my recent inventory checks support this claim. If and when prices begin to move up farmers will slowly bleed off their inventory thus keeping prices in check. A strong dollar also presents a problem of going long any of these commodities, at least over the near term. The way to play this is via a call spread by which you can define your risk. For the farmers sake, let's hope you're right.
Joined Jan 2005
|
Status: Keep Learning
|1,180 Posts
Generally I am bullish medium term on all the Soy complex. Primarily through COT and how producers & commercials were positioning themselves in the recent decline, I would say that the Soy complex reached (Or very close to reach) a medium term bottom (If not a long term one).
For the supply glut, it's true, however, being a contrarian, I believe this should mark the inflection point. A couple of weeks back, I read a story in Reuters about the grains supply glut and what made me contrarian bullish when I read it was the headline which said "Grains piled on runways, parking lots, fields amid global glut" (Link: tp://reut.rs/2pqr2BR).
Ironically, immediately after the Reuters report was published, everything in grains was rallying like crazy from their bottoms, which again is a contrarian signal to me.
