Tuesday, July 15, 2008

Corn and Live Cattle News and Thoughts

Tom Dyson writes in DailyWealth that he believes corn prices are set to drop sharply - and reiterates his favorite plays are live cattle.

After thinking about corn a bit, I also now believe that there is more risk on the downside. Potential catalysts for sending corn lower are the impending bust of corn-based ethanol, and a bumper crop. Catalysts that would send corn higher would be a wiped out crop. However with the bearish news that has come out in the past couple of weeks, it's looking more and more like the crop is fine.

I recently dipped my toe in this trade, and shorted the Dec Mini-corn contract yesterday. I may look to add another Mini contract or two on further weakness, and will close the position on any significant sign of price strength.

On the live cattle front, here's a quick take by Dennis Smith over at Barchart.com. He believes the recent sell-off in live cattle is overdone, and is looking to re-enter the position when support is found.

I still have one live cattle contract that - somehow - I have not been stopped out of yet. Hanging on by a thread. But I am also looking at the longer dated live cattle and lean hog contracts closely.


S'wheat Times said...

Interesting Article:

Hedge Funds Slowly Starting To Rethink Commodities

kunal dusane said...

RELINFRA FUTURE is looking weak on charts, short build up has been seen, we may see more downside, if it sustains
below 450 levels. epicresearch.co

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