Ag Bloodbath: Wheat, Corn And Soybeans All Limit Down

Tyler Durden's picture

Even as Crude continues its strength in light of Gaddafi's filibuster that may soon dethrone's Bernie Sanders record-setting speech, other commodities are not sharing oil's enthusiasm. In fact, the Ag board is a bloodbath, after wheat, corn and soybeans have all traded limit down, on what are rapidly becoming pervasive margin liquidations. Perhaps the fact that the market forgot that it can go down and is experiencing its biggest drop since November, is forcing many specs to unwind huge margin positions (remember that margin levels on the NYSE are the highest since Lehman), causing a rout in virtually every risk asset. One thing is certain: even with stocks down for the first time in arguably forever, the vol in FX and commodities continues to be the place to be for those who pursue rapidly repricing asset classes.

Full commodity pricing array below.

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Stuck on Zero's picture

Up limit.  Down limit.  Commodities then stocks then PMs then FX then real estate then ...  someone's getting very rich by jerking the system around.  Beginning of the end?

Pegasus Muse's picture

Just out:

Embry - Short Squeeze in Silver, Manipulators Getting Overrun

We have been anticipating this for some time which is why we have had such high price targets for both gold and silver.  Without exception everybody is saying that demand is off the charts for both metals.”

With gold and silver pulling back, King World News interviewed John Embry, Chief Investment Strategist at Sprott Asset Management.  When asked about the move in gold and silver Embry stated,

John Embry continues:

“There is a tremendous bid in the gold and silver markets at a time when the market is tight in these metals and there is a concentrated short position in both gold and silver.  The Middle-East crisis has come out of left field and this is creating additional bidding in the precious metals markets.  To be bearish gold and silver is to be bullish paper currencies and in view of QE and sovereign risks, that is a terrible bet.”

When asked about silver Embry remarked, “Eric Sprott and I have always contended that in silver if you get some serious physical buying in the absence of above ground inventories that are available for sale, that the paper manipulators would basically get overrun.  Right now we are in the process seeing that unfolding.

I definitely think a short squeeze is underway in silver.  The evidence will be if the price of silver moves sharply higher from here.  I think you will know if you have a real short squeeze if this thing starts piling on gains in the next week.

The price of silver has been held back for so long and this is not something that can be cured with existing mine production because mine production has been sticky.  People are coming after silver as a monetary asset because it’s so much cheaper than gold and this is creating an explosive situation.”

When asked about gold specifically Embry commented, “The Asians are looking at the new budget proposal from the US and saying, “Get me out of the dollar.”  The other thing that is amazing to me is the sentiment is so bad in gold.  There is remarkably little interest in gold, it is almost surreal.” 

Embry noted that for the big gains investors should look to the mining shares, “It is time for the investors who really want torque to buy the precious metals mining shares.  I think based on ratios that I follow that the shares are at one of the cheapest points vs the metal in recent history.  I could see trading days where some of these shares will be up 20% to 25% at a time.

 As bullish as I am on the mining shares, I was deeply concerned with the provision in the budget where President Obama was looking to take a 5% gross royalty from mining on public lands.  It is a cash grab and nobody is looking at the fact that the return on equity has been awful for the last 20 years.

I think that this is a very short-sighted attitude.  The psychological effect of this could have a net negative impact on overall economic activity.  It is simply too early in this bull market to put these kind of pressures on mining companies when they have had such a terrible ROI for so long.

I think there is enough upside in the prices in mining shares that they will do fine, but this is just a retrograde move at this stage.”

One of the things I have always liked about John Embry is that he speaks with tremendous authority and conviction.  You have to remember that Embry was the first analyst from a major firm to proclaim a bull market in gold.  He has remained steadfastly bullish during this cycle and he has also put his money where his mouth is.


bankrupt JPM buy silver's picture

CFTC looks like they have all this under control and are implementing "orderly markets"

Fuckin monkeys, biggest dog and pony show next to the ben Bernanke right now.

tmosley's picture

All the way back down to levels not seen in nearly TWENTY FOUR HOURS!!

It's the end of the bull market!  All longs jump out of the nearest window!

lol.  Like I said before, we are approaching infinite volatility.  A cap on the price of physical is good, as it drains the reserves of the undeserving all the faster.  Just accumulate physical and you will be fine.

Just Observing's picture

"All the way back down to levels not seen in nearly TWENTY FOUR HOURS!!" Yeah....exactly. 34 to 33 doesn't mean jack compared to the "olden" days of 2002-4 when a buck smackdown was 15%


Long since 4.75/oz,  seen ALL these games before, and just waiting on triple digits.

jackpagan's picture

Long since $12.88 *Yawn* I'm with you. 

egdeh orez's picture

The fed and the banksters are now trying to kill stocks, in order to kill commodities (including precious metals).  They have no choice.  If stocks go up, commodities go up.

Hephasteus's picture

Sell off is probably happening in palladium and platinum and oil. That's how they smash gold and silver any more. They inflate those 3 things and then crash them hoping everything follows in their footsteps. Doesn't happen any more though. Expect silver and gold to go up big time end of this week and early next.

GoinFawr's picture

aaaahnd, here he is folks, right on cue.

Give 'im a hand!

<golf clap>

So by 'for now' I guess you meant the next 15 minutes or so?

aaahnd, there he goes folks! Woudja look at that!

Hephasteus's picture


Now 1399.98 That'll teach them not to mess with 1400. LOL

FoieGras's picture

A nail in the coffin of the hyperinflation imminent theory.

Ragnarok's picture

The leverage collapse will cause a dollar spike and assets collapse.  Then the Fed (and other CBs) will have permission to flood the market at infinitum.  Then Hyperinflation.

silver_serf's picture

In regard to Red Barrons comments below, as soon as I posted this link, 3 replies popped up instantly to distance my comment

traderjoe's picture

Exactly. Deflationists don't seem to believe hyper-inflation can be caused by massive deflation as well. Hyper-inflation is a loss in confidence in the currency. This will happen if asset prices collapse. Among other things, producers of hard assets, including food, oil, etc. will stop accepting fiat dollars for real goods. Do deflationists really believe their arbitrary pieces of cotton and ink will become worth more in a collapse?

NotApplicable's picture

Not only that, they don't seem to understand that a hyper-inflationary loss of confidence is a de facto demonetization of dollars. The resulting true deflation comes when suddenly only commodity money is accepted (i.e. gold) for trade, resulting in price deflation as measured in the new money (which suddenly rises in value to its demand as a monetary instrument).

Basically, deflationists fall into a trap of measuring everything in dollars, because they think it will remain money. Like all other paper currencies though, it will fail, as the theft it engenders is not sustainable over any lengthy period.

Bull Meat's picture

The deflationists that I respect aren't falling into the trap that you suggest.  Take Nicole Foss at The Automatic Earth ( as a prime example.  She repeatedly asserts that all fiat money eventually dies a hyper-inflationary death.  The issue is one of timing.

I lean more toward the deflationary camp though I do not hold myself out as an expert, nor am I entirely married to that outlook.  I'm just responding to your mischaracterization of the deflationist view.

NotApplicable's picture

But when you are saying deflation though, aren't you denominating it in dollars?

My point is that defaltion is measured (priced) in monetary terms. If the money itself dies, can it really be a standard of measure any longer?

See, to me this is where the entire inflation/deflation debate falls apart. IMO, they refer to the exact same thing, but seen from a different perspective. To say that dollars will die in a hyper-inflationary collapse, yet expect them to gain in purchasing power is nonsensical.

Vampyroteuthis infernalis's picture

Hyper-inflation collapses happen after all of a system's debt has been purged. Deflation is the short term game while hyper-inflation strikes as the final nail in the coffin.

Arkadaba's picture

I think that it was Automatic Earth is saying - deflation for some unknown time and then the fiat dies in a hyper-inflationary s**t storm. Not sure I see this as the most likely outcome but I find it useful to read their articles. As for most likely scenario - who knows. I know some including ZH were predicting global unrest due partially to "unintended" effects of QE but the events in North Africa and Middle East have taken me by surprise.

GoinFawr's picture

Well I know what you're sayin' NA, if it's any consolation. There are  a variety of other scenarios too, natch, but the one you've outlined definitely has some decent odds.

akak's picture

Honolulu, Hawaii (AP): A crew of deflationists, led by captain Karl Denninger and first mate Bob Prechter, plan to launch an expedition to sail to the edge of the flat earth.

GoinFawr's picture

Their goal: to sail off that edge gathering incontrovertible evidence that Copernicus was wrong and that, in fact, the sun does orbit the earth... and man, is it movin'. On the way they plan to stop by the moon for a spot of green cheese.

SilverRhino's picture

Looks to me like this is just a sign of massive volatility instead of a top.   Which in an of itself is a sign that the underlying fiat and fundamantals are just unstable as hell.

Top calling?  Nope.

nontaxpayer's picture

These developments can take the whole decade, it was never going to be a swift and easy experience leading to it. It's still coming though, but there will be many twists and turns along the way.

RED BARRON's picture

Gold and Silver have clearly completed 5 waves up on 4 hour, and stochastics and other studies confirm a top is in for months to come.

homersimpson's picture

The only way gold/silver are at a top is if Banana Ben doesn't do QE3.. or if Congress has enough balls to strip him of his ability to initiate QE3..

In other words, gold/silver has always been a hedge of funny gov't accounting tricks.. and there are plenty of "tricks" left in the bag.

arkady's picture

I think Rosie's arguments regarding how difficult it woul be to drag QE3 through given core/headline inflation rearing its ugly head is compelling.  

Some suggested there is no political will for QE3, but Ben never struck me as one to adhere to political opinion.

kridkrid's picture

well... from where he sits... I don't think he has an option.  - From where he sits.

redpill's picture

I think he wants to be canned and is trying to figure out what in the world he has to do in order to get fired if it hasn't happened yet.

arkady's picture

Funny thing is, I agree with you!!  If you just spent 2 years goosing the market in hopes of stimulating some organic growth and now you realize it failed, what do you do?  Logically speaking you continue to goose, otherwise such hell will be unleashed it will not even be funny.  His entire thesis of fighting deflation will be flushed down the toilet if QE3 is not created. 


Still, how does he continue justifying it?  Even now, more and more people in Congress are waking up to the fact that our Fed is sinister, how long can it continue in practice?

Stuck on Zero's picture

Helicopter Ben must do a QE3.  He has to buy all the treasuries coming back to the U.S. from all over the world. 

Unlawful Justice's picture

Posit sophistry RED, If it was possible to learn to "read" the magic chart, we would all be rich.    

tmosley's picture

Technical analysis of your post has confirmed that you will be impoverished for decades to come.

william the bastard's picture

You have no idea how retarded your ideas and insults are.

tmosley's picture

You have no idea how weak it is to simply snipe at ideas rather than actually, you know, refute them.  With facts.


mick_richfield's picture

Are you serious?  Stochastics confirmed it?  Holy crap!  That's a greek-root word!  I bet frikking Aristotle invented that crap!

OK, you convinced me!  I want to resist, but I am writhing in the grip of Pure Reason!

I'm even going to sell my avatar, and get something of real value like a picture of a dead president (from a dying country) with a big number printed next to it!  Backed up by the Full Faith and Credit of a nation with neither!  Thanks, man!


Tyler -- is it possible to change the captcha questions based on login name ?


Fed delenda est.

Hugh G Rection's picture

something of real value like a picture of a dead president (from a dying country) with a big number printed next to it!  Backed up by the Full Faith and Credit of a nation with neither!  Thanks, man!

thanks mick, that made me laugh.

StychoKiller's picture

Whoa!  Is that the Almighty at the end of the table throwin' naturals?  Guess Einstein was incorrect! :>D

JonTurk's picture

what happened to natural gas? it is sinking like shit

pragmatic hobo's picture

is this ... deleveraging?

gwar5's picture

buy. buy. buy.

AnAnonymous's picture

Just as Ben Bernanke  predicted...

arkady's picture

So, anyone care to explain this?  How does turmoil in the Middle East result in limit downs across the board in the very same commodities that are driving the unrest in the first place?  At least if the Dollar rallied today I could understand, but what is this?  

AZSovreign's picture

Think you may have answered your own question.....

arkady's picture

Enlighten me.  If you are suggesting that turmoil is causing demand shortages then why were commodities still rocking in the face of Egypt/Algeria/Bahrain/etc.  Libya with it's size and demand is nowhere compared to Egypt, it cannot be a factor.