"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Wednesday, November 12, 2014

Soybean Bulls Recapture the Bean Market

I have been writing of late how the strength in the meal has led the entirety of the grain floor higher, as it has been dragging not only the actual beans higher, but also the corn. It now appears that the beans themselves, which had been moving higher but had not put in as impressive a performance on the charts as had the meal, are now doing just that.

Bulls have not only managed to close a significant chart gap, but they have also bested a key technical indicator, namely the 100 day moving average. That level should now serve as support on any downside tests for the bulls to maintain control of this market.

If it does, the next likely target for the bulls is near the highs made in August. As unlikely as it seemed based on the size of the mammoth crop, the logistics involved in an historically low 2013-2014 carryover of some 90 million bushels, have set meal and bean buyers competing against each other to secure sufficient supplies to meet current demand.

I do not know how long this can last in front of such a massive crop but one cannot argue with the charts and expect to either prosper or survive, especially in this day and age of gargantuan hot money flows which obliterate everything in their path. With so very few commodity markets moving higher on account of the strong Dollar, when funds do find a market that they can push from the long side, as they recently did with cattle, they will mercilessly force it higher to maximize their profits.

It is interesting that the Brazilian Real continues to sink against the Dollar making US beans less and less competitive on the global market but for now, no one seems to care as the mad scramble is on to obtain meal supplies, regardless of cost. How the bean and meal markets end this week is going to be key to whether or not this is the merely the waning moments of a counter trend move or the actual start of a new bull trend.

I will be the first to admit that I did not think this was possible given the currency differentials, the soaring Dollar, and the size of the crop, both here in the US and what is expected in S. America. There is certainly not going to be any shortage of beans based on all the available information we have but apparently demand is there to absorb it all, at least for now. I still wonder what is going to happen to prices when the supplies of meal become more plentiful and crushers' margins start to erode.


  1. Nato says Russian troops entered Ukraine, bloomberg says.

    1. H'mmm...I think it was just yesterday I suggested Putin would send them in during this Asian Summit.
      Talk about an uncomfortable situation that's about to develop while they're still in each others company.
      Awkward and a pivotal historic moment is close at hand.

    2. How much more must the North Atlantic Terror Organization lie to you until you will begin to question more?

  2. These AG pit open boyz still got bullets huh! Meal & beans new lows. so jan beans just back under the 100-day sma.

    somebody must want to short a break n hold by dec corn under the former double top 381.

    well the day is early... rumors of argentine meal coming our way was hitting the instant messaging at the desks.

    on the bulls side the brazil crop is behind, and really won't know the size of that crop until january.

    HUI nice start above mondays high, volume looks low across the leaders.


  3. well HUI keeled again to low o day.

    nothing with war in ukraine or the middle east with much trouble in iran,iraq, syria,turkey,palestine means anything if gold and crude oil aren't reacting.. perhaps last friday was 'buy the rumor' now sell the fact.
    ..everytime wheat popped on ukraine previously it was a good short... probably more the weather this wheat move plus much happened when soybeans were up.

    argentina meal is $70 less than usa at the gulf per unit. brazil similar.

    Germany's DAX: -1.7% closed
    europe is a mess no doubt... eur/usd can't get thru 1.25 round number for 3rd session.

  4. Check out the chart of Victoria's Secret (LB). Stock has run from $10 to $79, and $20 of that run has been from this year alone.

    Then look at Macy's and Kohls.

    Flat out proof that the consumer has NEVER BEEN STRONGER.

    And at the same time, the mining sector is now trading at depression lows amidst one of the greatest sector bear markets in recorded history.

    Yet none of the "acclaimed experts" predicted either of these events.

    Whats up with that?

  5. Don't look now, but XRT just blew out to fresh, new, world record highs, and XLY not too far behind.

    Imagine the huge wealth you would have enjoyed if you would have loaded big on Nike at $20 in 2009, now at $96. And don't even get me started on Under Armor, $5 to $69. That means a $500,000 IRA account would be worth nearly $7 million.

    You would have been:

    - Done
    - Finished
    - Retired

    Never have to look at a quote screen ever again.

    1. Nice gains to be sure, but what percentage of the American populace do you think are actively engaged in the markets and thus fitting into the " never been stronger " category.

    2. You are such a sweet soul. Enjoying rubbing peoples' nose in manure who got hurt in the commodity complex breakdown. So sad people like you exist.

      I liked it better when you were silent in October during the short lived correction. I enjoy Trader Dan very much but reading your gloating just makes me hope the rug pulls out of the market so you go away again.

  6. Inversely correlated to mining shares lol

  7. I think just about everyone here already realizes this as TD has been talking about it for quite awhile.

    Something for those on the fence to chew on....
    "Gold, oil will be in the dumps for another decade"

    Published: Nov 12, 2014 6:00 a.m. ET

    The ‘supercycle’ that drove commodities higher has now reversed...(cont.)



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