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Ag Bloodbath: Wheat, Corn And Soybeans All Limit Down
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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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?
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.
KingWorldNews.com
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.
www.silvergoldsilver.blogspot.com
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.
"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.
Long since $12.88 *Yawn* I'm with you.
The Empire Strikes Back
thanks
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.
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.
For now 1400 has been lost.
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!
+1400.50
Now 1399.98 That'll teach them not to mess with 1400. LOL
A nail in the coffin of the hyperinflation imminent theory.
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.
https://www.fbo.gov/index?_cview=1&id=d88e9d660336be91552fe8c1a51bacb2&m...
In regard to Red Barrons comments below, as soon as I posted this link, 3 replies popped up instantly to distance my comment
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?
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.
The deflationists that I respect aren't falling into the trap that you suggest. Take Nicole Foss at The Automatic Earth (theautomaticearth.blogspot.com) 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
well... from where he sits... I don't think he has an option. - From where he sits.
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.
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?
Helicopter Ben must do a QE3. He has to buy all the treasuries coming back to the U.S. from all over the world.
https://www.fbo.gov/index?_cview=1&id=d88e9d660336be91552fe8c1a51bacb2&m...
Posit sophistry RED, If it was possible to learn to "read" the magic chart, we would all be rich.
calling Bob Prechter.
Technical analysis of your post has confirmed that you will be impoverished for decades to come.
You have no idea how retarded your ideas and insults are.
You have no idea how weak it is to simply snipe at ideas rather than actually, you know, refute them. With facts.
Shoo.
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.
thanks mick, that made me laugh.
Whoa! Is that the Almighty at the end of the table throwin' naturals? Guess Einstein was incorrect! :>D
what happened to natural gas? it is sinking like shit
is this ... deleveraging?
buy. buy. buy.
Just as Ben Bernanke predicted...
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?
Think you may have answered your own question.....
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.
No I think you may be on to something, from your second question. If all of the unrest is caused atleast initially from rising food prices, then maybe Bennie and the crue are going to just hammer specific foods in order to lower the price thus easing the cost of food globally?
It's commodity whack-a-mole. You hit one, but two more pop up. Keep doing it, and you have yourself a real problem, as we are seeing now. You can't keep precious metals AND oil AND food down. This will evolve into a "sophisticated" version of hyperinflation, where the prices of oil and food are kept fairly low (with abundant shortages), while everything else goes to the moon. Except for PMs, which are orbiting Alpha Centauri.
The wheelbarrows full of money come AFTER the hyperinflation starts. They are there to stop people from starving. A Hail Mary, if you will. One with no real chance of succeeding over the medium or long terms.
Gadaffi made clear in his speech that he will reduce demand with his military.
Hey all is well. Look...everyone getting out of wheat, corn soybeans, gold, silver, oil and gas off it's highs...and all must be piling into treasuries. Life is good. BTFD in the dow!
Edit: Notice how this all happened when the US market opened. Yesterday...not so much.
Ag's will be back en vogue soon again, BTFD?!?! :))))))
Leverage out, cash in.
BTFD, with both hands
Hold your positions.
"But Captian we are surrounded, and you want us to hold our position?
Captians reply " you are not surrounded, but just engaging the enemy on all sides"
+1
Definitely time to buy in on Ag's. This time speculators, next time, mother earth and cycles and weird weather and plunging stock-piles.
ORI
http://aadivaahan.wordpress.com/2011/02/21/through-a-lens-darkly/
Why anyone would ever want a paper contract for something is besides me.
Unless of course, you're actually buying paper.
Disclosure: Long trees/hemp.
lol +1
+500 sheets of wide ruled notebook paper.
Go long VIX, the rollercoaster is getting started again!
+1,
Volatility to rule while the world watches itself burn. Precious metals to make gains. Watch the dollar vs. oil, that will be the tell for when the ship is going to capsize.
Gee...I am so shocked to find out that it was pure speculation driving up the prices to the extent they were up.
The quivering gerbil, wicked witch and short-pants Timmy are on it hard 184K vol in GCJ and 109K vol in SIH already. The tsunami of physical demand will wash these fools away.
I think I'll go pick up my 145 lb bag of cocoa now and toss it in the cellar...
That's where you keep the family.
William --
You are not only fatherless, you are motherless. You are a cheap Artificial Intelligence running simple algorithms. Tell your employers that you are not earning your money, and erase youself.
Begone, foul dwimmerlaik.
Fed delenda est.
Keep you dim bulb buried at ronpaulforum.com and speak to me only when addressed.
Only if you show the same courtesy to EVERYONE here, including Tyler.
ie, stop posting.
Don't feed the trolls.
The runup was engineered since last July by the elite so that they could stage some *revolutions* in the ME. Now it looks mission is 75% completed. They need to control the prices now.
What matters not is limit up or limit down activity but rather the volatility. Political chaos, social unrest, toppled gov'ts, natural disasters etc etc etc. It's here folks.
Take your stand against crimes against humanity- stand for physical delivery! Buy all the silver and gold you can.
Cocoa, cattle, and coffee are still up. BTFD.
Shared this earlier:
Farmers Can't Meet Demand as Corn Stocks Drop to 1974 Low
"The smallest corn inventories in 37 years are a sign farmers around the globe are failing to produce enough grain to meet rising consumption, even as planting expands and food prices surge."
http://www.bloomberg.com/news/2011-02-22/corn-stockpiles-falling-to-1974...
Limit down today...limit to Benfinity tomorrow.
Very strange action today, I think it means nothing at all other than the world-economy is moving closer to a complete breakdown...massive irrational volatility seems to be the result of flouting the laws of economics and nature for too long. BTFD indeed!
The world has gone off the deep end. No ifs or buts. Therefore pointless to try and analyze why this or that is happening in the markets.
Sit back and embrace the horror as all implodes before our eyes.
How do you make a buck with this attitude?
What, you are not independently wealthy?
That was priceless...
ORI
Well said but it is a lack of diligence on your part not to attempt to discern your environment. That is not just a matter of making a buck but of survival itself.
Asleep upon your own laurels?
Naw....it's all funny as shit!
This is all fairly minor so far. Huge volatility is probably our future for a while. Buy low sell high.
does someone expect war? why all the outs and into cash? i mena wheres the money going and why? thats a big run away from comods, does someone know something? or is it a retreat to safety?
lol and where is safe? surely not USD?
Good positions are having to be sold due to covering for margin positions.
Recall options expiry on Saturday last week and PM futures expiry on the 24th.
Couple that with a short squeeze in the PM market = funds & investors who made wrong calls previously and now have to liquidate to cover margined positions.
You can also throw in those who took bearish positions against the PMs in inverse ETFs.
~Misstrial
tks misstrial that makes sense.
Speaking of which, poor saxxon,
"by Saxxonon Thu, 02/03/2011 - 12:59
#931547
Long ZSL right here, right now."
Well, I suppose he got a little relief today...
<face palms>
Yeah, I remember that one, lol...
And so it goes....
~Misstrial
Are the funds cashing out to long oil?
It's about time! Is today an omen of an end to QE2, just a few months away?
Wouldn't Gold and Silver be plunging if they decided that?
I know how popular Denniger is on this site but this explanation seemed logical:
If you read the tea leaves - and the rumors - you're damn close to being convinced that Bernanke is going to be forced to pull system liquidity.
I offer as evidence cotton, wheat, corn, soy and more. All in the toilet.
Crops suddenly got better? No. In fact there's a report out stating that huge parts of the nation will likely suffer monstrously bad flooding - which just happens to be prime cropland.
No, what's being taken off the table today are liquidity bets. Bets that Bernanke would continue QE2, then do QE3, 4, 5, and on....
Read rest:
http://market-ticker.org/akcs-www?post=180652
Italy's industries and cities are heavily dependent on Libyan oil & gas. Italian banks are ass deep in Libyan investments. The off-the-books Mafia economy in Italy is heavily dependent on Libya as a source of hard drugs - now cut off. Look for several major points of collapse in Italy over the next few days. Banks first probably. It is still winter - people will not take kindly to freezing in their homes. Berlusconi could be hung like Mussolini ( if only!). Then watch the tsunami spread along the coast of the Med to Spain. Until TPTB can create a no-fly zone over Libya Momar the Madman will continue to massacre his people from the air and sea and on the ground. Oil & gas installations will be targets of anti-government military units - the trans-Med pipeline will probably be blown. And there is absolutely nothing that the EU can do about any of this. Cheers.
Lets see the Brussels bureaucrats Dodge this one.
Go long antacids!
oh its a squeeze on cash. they expect another liquidity crisis , and are gtting everything out?
Herd mentality at it's finest. Fuel prices up and food commodities drop? Never mind the adverse weather accross the globe.
Many Americans take food for granted, this will prove fatal for many.
But SECI is flying today.
News
This is "price stability", brought to you by the Federal Reserve.
Agriculture commodities are not numbers on a board and just like oil it takes capital, risk and work to produce. It makes no difference whether futures contracts go up or down when considering the alternative in fiat currencies. And just like oil which gains on risk premium, food stuffs are not going down as priced in fiat money, just the opposite.
Way too many people trade on short term using whatever platform, but trades do not actually produce anything except electronic fiat currencies which themselves are used on same. Guaranteed production of food is a must at any price, and despite the noise in the markets, never forget the fact that everyone must eat or die.
Level thinking.
Thanks for posting.
~Misstrial
With the amount of speculative money that poured into commodities, I don't know why anyone is surprised to see this type of action in wheat, cotton, etc.
on Thu, 02/03/2011 - 12:21
#931357
Yawn....wake me up if it hits 1380"
Thanks TCT. See, sometimes your posts do have meaning; though rarely what you intended them to, granted.
And bonds are up nicely on the day too. Keep in mind that all the "experts" hate bonds. It's not contrarian to be anti-bonds.
metals next when people realise rates are going up .....
There will be a QE3. It will have a different name or will be hidden from site but it will come. After all, how better to loot the treasury.
(d)
I said the Blythe would not go peaceably. Just a theory, the JP Morgue shorts the shit out of everything else and hopes silver goes with them. Maybe????
Physical. Blythe, Timmy and The BenBernank can sell all the imaginary silver they wantt but can they deliver? Just a matter of time.
Volatility may thrill some HFTs but is scares the shit outa the real Ag community.
This is the time of year decisions are being made by those that absolutely control the supply side.
Current policy regime is promoting more acreage. Will the price ?
I continue to suspect the view of many on the farm will be to limit risk exposure.
I will be traveling across Wisconsin, Iowa, and into Nebraska this coming week, drinking bad coffee, and talking with people that will determine to a large degree what the price will be for corn and feed stocks, and consequently dairy and meats.
http://www.dairyherd.com/dairy-news/latest/Is-there-enough-acreage-.html
Got Food ?
Volatility may thrill some HFTs but is scares the shit outa the real Ag community
Actual food is a barbarous relic.
I like that!
Food : the new barbarous relic.
"There will be a QE3. It will have a different name or will be hidden from site but it will come. After all, how better to loot the treasury."
+1
But I think it's already here, note banks loaning money directly to munis to circumvent the bond market process.
Also- I think the word came down from upon high to unleash the dogs of inflation due to the credit card & HELOC offers I'm seeing lately- releasing bank reserves onto the street.
"Bloodbath" my ass. Silver is super strong, they threw everything they had at it and it stuck at $33.