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Post by victory on Mar 21, 2024 20:11:03 GMT -6
The funds do have a lot of short positions to unwind. As prices continued to drop, the funds who shorted the market were making big money. Now that prices have bottomed (looks very likely) these funds will have to unwind their short positions, or else they will lose all the profit they made. The prices will be pushed up as they buy their way out of their short positions.
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Post by Oatking on Mar 22, 2024 6:49:36 GMT -6
I hope your right cpt USA. I refuse to price out my new crop soybeans at a discount to canola ! Beans are cheaper to grow but lately beans have Been yielding 10-15 bushels an acre less than canola on my farm . I will wait till july to see if drought grips us again. Don’t feel like buying out bean contracts for a second time !
I feel the elevators are sending out feelers to hook you in now on new crop beans at 14 bucks. It’s tempting but not good enough !
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Post by cptusa on Mar 22, 2024 7:31:51 GMT -6
Markets probably tank today due to midwest moisture in drought area. No snow at 0500 and now there's 4-5" on ground. It's about over though.
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Post by garyfunk on Mar 22, 2024 8:05:48 GMT -6
Actually don't mind if futures drop a little today. Needs to get into that 'climb early week and drop end week' mode for the next few months. Seems that's the only way to higher prices. Just an observation.
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Post by kevlar on Mar 22, 2024 8:10:06 GMT -6
I agree, I seem to find if prices go up on a Friday the next week will drop.
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Post by kenmb on Mar 22, 2024 8:50:35 GMT -6
For every short position there must be a long, or so the story goes but I haven't heard how that all works when there is an infinite amount of contracts available to be created. If there was always a fixed number of contracts in existence then I would agree a position on each side is taken but when more contracts are brought into existence or removed then I don't know how the long/short story line holds up. And so I am not sure that I can guarantee a record short position means a price rally to get out of that short position. Can't more new contracts simply be issued at a price of say 5% above the short position? I don't know. Never seen it explained how infinite contract creation actually works on such things. Regardless, time will tell how these short positions get cleared. If a fund took a big short position and grain prices have hit 3 year lows, does the same "smart" money still think lower yet is where the money is made? So extend shorts further? Seems risky. Yes Brazil estimates are noticeablely lower than USDA, that could be playing into the soy/canola pricing. Wheat in India is right around harvest mode right now and the record yield guessed months ago isn't holding up so that is the next area to watch. India grows and consumes a lot of wheat so world stocks will change based on April info. I got a chuckle out of this one, right off the CME website about crop reports and market reactions and also supply/demand. 59 seconds after a crop report was released, the markets make a significant move. Hmmm. Why I say "supply and demand", is that a true market based on supply and demand would need more than 59 seconds to read the report, analyze it for accuracy and then take action on trade. This isn't happening in 59 seconds. And it really isn't even happening with AI or algos either because even such things as that would take a much longer view than 59 seconds to formulate a "future" or long term plan. No, it seems to me it is already decided where markets are going and the minute of the report is just an excuse to say algos and AI are responsible. Free markets don't rely on algos to make important decisions, casinos and market manipulation combined with high speed would.
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