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| One. We don't want a market based upon stuck shorts. Those type markets, in the long run, will cause us more harm than good. We also do not want markets in which the longs or short cannot liquidate.
Two. We are in legitimate demand markets. See the posting below wherein I posted the facts associated with the July 1973 corn. We want to retain this demand and I believe it exists. Corn is the weak sister at the moment. Too many people coat-tail a market and buy corn as they fear buying wheat. I suspect those folks will begin to run tomorrow night.
Three. While these markets can be influenced very quickly in the short run by large transactions, the real world is, in the final analysis S&D establishes the price. I learned that 25 or 30 years ago, I & some clients took every bushel corn delivered as one option expired to improve a spread position. We improved our position about a penny after the costs. These grain markets are very deep...the last COT report reflects of the 2 million contracts open, commercials own 856,000 and are short 1,060,000....these days we trade in 1/4 cent increments, used to be 1/8th...every 1/2 cent or so, very large buying or selling by commercials can be uncovered-
Four. When in the cash part of the business, I've bought more grain on down days, than on up days when people were nervous. I suspect, I hope not, but if this market stumbles here for a couple of weeks, a considerable amount of grain could be priced extending the breaks in price, should they occur.
Five. Few markets go straight up-sometimes its the end except those are usually supply oriented markets....this is a demand market.
Six. NO ONE HAS A CLUE. I ASSURE YOU, EVERYONE WITH POSITIONS IN THIS MARKET IS A LITTLE BIT ON EDGE THIS WEEKEND-except the big commercials.
It would not surprise me to see wheat all over the board the next couple of trading days and turn around and bite everyone.
A little housecleaning is probably going to occur this coming week, and I am not even too sure about that. This market needs a cleaning. Every once in awhile, people have to learn these markets can bite..and sometimes hard and caution is always the first consideration. There is a fluid flow of money in futures markets....always to the winners but it changes hands almost constantly. Try to grab a little out of the middle & the extremes...if you try to get it all, you lose.
Edited by SeniorCitizen 2/9/2008 21:43
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Some Few Things I Have Learned.
