MetMike--Are you buying grain tonight?
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Started by tjc - Aug. 20, 2023, 6:42 p.m.

  I guess I am asking whether this week 'weather' is already in the market.  No rain, excessive heat, but is it factored in.

  I dont think so

  Charts almost favor a weekly gap to be created.

By metmike - Aug. 20, 2023, 7:45 p.m.
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I strongly agree that we should have a weekly gap higher here on the open.

All rain has been taken out thru 2 weeks now, though it's hard to make a case for weather to still be the main driver in early September. 

The intense heat only lasts for several days this week and was in the forecast for more than a week but is still very impressive when its on your doorstep and you see the actual numbers.

Outside some very early rains last week, it was mostly dry but on the cool side last week, so crop ratings may not change much tomorrow. I'm leaning towards a small drop.

The week after that, August 28th will be see a drop of at least several %.  Maybe losing most of the improvement that we saw last Monday, when beans were a shocking +5% G/E.

Also, historically, the C and S very often put in a seasonal low at or just after the August USDA report.

They used to call it dialing in frost risk premium in the 1990's and prior to that but that risk has been lowered because of global warming.

By metmike - Aug. 20, 2023, 8:03 p.m.
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My order to buy on the open did not get filled. Should have been more aggressive on the price )-:

Missed it by 1.5c )-:

By tjc - Aug. 20, 2023, 8:07 p.m.
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  Long 1362.25 on buy order of 13.64 OB

By metmike - Aug. 20, 2023, 8:11 p.m.
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Good for you tjc!

I should have had a similar order.

By tjc - Aug. 20, 2023, 8:19 p.m.
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  IF, IF this weekly gap holds, does one measure 73 cents onto the 13.62 to get 14.35 target??

By metmike - Aug. 20, 2023, 10:20 p.m.
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No, that might not be a good way to trade this, tjc.

It might but there are too many other items that could be more important.

We're already up 70c from the lows last week on Tuesday from this weather and the growing season is coming to a close.  So this current price, may have completely dialed in all the potential damage for the rest of the bean growing season??

If this were July or especially June, the upside would be unlimited.....$2, $3? Just would depend on when the forecast stopped being bullish.

However, 70c at this time of year is a gift to the bean market. 

You got in at a great price earlier this evening(the lows) and it will be tough to fill that gap. Weather will NOT fill it because its too late. 

If it were me, I would have a stop to protect X amount of my profits and then just keep raising the stop as we make new highs.

If you get stopped out on a spike lower that still had a good trade. 

You never want to let a gift like this slip away from being overly optimistic.  Corn is trading below the opening price and near the lows but still has a tough 4c of gap to chew thru. This is a warning sign that the weather is failing to inspire additional buying for corn, that has weaker fundamentals than beans and is closer to harvest. 

Beans, with much better fundamentals might keep going higher, with weather being added fuel. I hope that happens for you.

By tjc - Aug. 21, 2023, 9:10 a.m.
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FYI--sold 13.76 after gap at 13.79 was filled and little upward MO thereafter.

Missed my rebuy on CTZ after the disaster stop out Friday.

By metmike - Aug. 21, 2023, 11:31 a.m.
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Congrats on a wonderful trade, tjc!

I know that you are a position trader but trades like this are sometimes my favorites.

That's because weather can suddenly generate a tremendous, emotional response by the market when everybody piles on at the same time to OVER amplify it, especially on Sunday Night opens when the market was closed for 2+ days.

Funds come in the next morning and can either validate what the overnight traders reacted to or make it clear they OVER reacted and take the opposite position.

If this were June or July, we would have continued MUCH higher. I'm 100% certain of that because this weather forecast is MEGA bullish all the way out......with the exception of some rain sneaking into the upper level ridge into NE/IA/MO later this weekend. which by itself, just a small LESS bullish weather element but if the market is trading Bullish X5 and the forecast goes to Bullish X 4 (hypothetical) it can go from +70c off the lows last week to +60c off the lows by dialing that in short term.  I hope that makes sense.

The corn failing last night was a warning sign that weather was failing to generate follow thru after the MEGA bullish gap higher open. 

Corn is -5c here but still well above the lows. They did a gap and crap, bullish/buying exhaustion reversal formation.

Beans have NOT filled their gap......yet. 

However, if/when they do, it will be the same formation on a market with stronger fundamentals and more bullishness that resisted longer. 

Again, I'm really happy to see you make money on this trade.

You totally nailed the entry(that I missed) because you traded it better than me(who was afraid to be aggressive).

I'm thrilled to provide my weather and other insights to confirm and supplement your thoughts and appreciate you sharing your trades here.