Monday, January 12, 2009

Corn, Wheat, Soybeans Slaughtered After USDA Projections

Grain futures plummeted today after the USDA issued it's supply and demand report, which projected larger supplies than previously forecasted. You can read the gory details of the full report here - or glorious details - depending on which side of the trade you were on.

Corn, soybeans, wheat, rough rice all basically closed "limit down" on the day, dropping the maximum allowable amount.

Wheat takes a nosedive after reading the USDA report.


My personal take on this report - in a word, "ouch." Can't say I saw this one coming - grain charts had been looking quite frisky of late, or so I thought - it's probably safe to call the grains bull dead for a little while after reading the supply/demand breakdown. I'm going to try and keep what powder I have left dry for awhile, so that we can reload down the road.

3 comments:

1modelcitizen said...

Thanks for the blog, it's a good read.

Ya know, it's a pity that these products are no longer appreciated for what they CAN accomplish. When taken literally, amazing returns are made. I noticed that wikinvest crosspollinated my most recent post with yours. Swing by www.ticktalklive.com to see what I mean.

Also, the kernal approach to forecasting appears to be all the rage right now: http://www.farmdoc.uiuc.edu/marketing/morr/morr_09-01/morr_09-01.pdf
Personally, if I had to speculate, which I don't, I'd stir in a hefty dose of Nassim Taleb's quant fallacies before going directional : http://www.edge.org/3rd_culture/taleb08/taleb08_index.html

Brett Owens said...

Ah thanks - wow, that is quite the crosspollination - our posts must have been quite intoxicated when they hooked up!

Agree w/ you on Taleb.

Kenny said...

thanks for the post! this seem to be a good blog for commodity trading.

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