The road ahead
With news of growing pessimism for world harvests, uncertainty in the livestock market, austerity measures and civil unrest in Europe, a strengthening US dollar, and a growing volatility in the competing grains and oils, it safe to say conditions are making forecasting in the short term a bit like guessing which way a leaf will blow in a tornado.
From a physiological perspective, corn going limit up in the opening hours of Friday will no doubt be spinning in the stomachs of all investors in the futures market. Volatility in the cornerstone commodity is bound to shake all other markets. The opening hours of Monday are primed for some chaotic behavior. I have no plans of moving on the market until it settles down a bit and the price trends get reestablished. I expect prices in the near term to be up across the board because of a near unanimous agreement that corn stocks are going to be down. The strengthening of the US dollar should continue to push prices up.
My advice, strap in and hold on, we might just be heading for a stock out. There could well be opportunities for big wins in the coming days. But we must remember that the futures market is a zero sum game. Each man’s profit is another man’s loss. So go forth and trade, but remember class, practice safe trading and always wear a limit.
October 5th, 2012 at 10:58 pm
Enjoyed reading again! Good analysis. Keep it up!