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Current Marketing Thoughts

RSS By: Kevin Van Trump, AgWeb.com

Kevin Van Trump has over 20 years of experience in the grain and livestock industry.

Grains Down Across the Board and Goldman's Early Exit

Apr 12, 2011

We had a WILD Ride as it was a "risk-off" day of trading in the markets.  I hope you folks are signed up and receiving my daily report as I have been talking about a possibility of a set-back and what you can do to position yourself.  Money flow was king today, as I had written early this morning, "if the commodity ETFs and funds begin to reallocate into different investment vehicles, it won’t matter what the fundamentals or technicals are telling us about the markets, the "money-flow" could simply be too extreme causing a major price break."  This was illustrated in today’s trading as wheat, which had some very bullish news recently, closed down 38 cents.  Beans closed down 38 cents as well, with Corn going limit down before closing the day at 23 cents lower.  Now before you get too excited and go out and sell 11’ and 12’, I do believe this is a healthy correction, but would advise folks to probably lighten up the load just to make certain you can ride out any storm that could possibly come our direction as the "money-flows" continue.  I have attached below a story from today’s report that illustrates adjustments that Goldman and other big players might be making...

 

Goldman Spook's The Market On Early Exit

As I continue to talk about money-flow, our friends over at Goldman yesterday decided to fire one across the "starboard" side letting us all know just how real it is.  If you are listening to advisers who are telling you crude oil prices broke because of a possible cease fire in Libya, think again.  Goldman jumped in and closed their "CCCP" basket trade, that included long positions in Crude Oil, Copper, Cotton and Platinum.  Goldman first recommended the basket of positions on December 1st, since then this investment strategy has returned 25%.  From what I have been able to gather, their goal was a return of 28%.  Rather than risking it all they opted to leave that last 3% on the table.  I am also told the cotton position was a actually a split between cotton and soybeans.  Of which the soybeans they still especially like.  Goldman traders are telling the insiders that they still believe there is upside potential in the entire basket, but the risk to reward ratios have drastically changed as of late.  Which is exactly what I have been telling you in our daily report the past couple of days.  From what I have heard, Goldman feels that crude oil demand at these levels may start to stagnate, and problems in the Middle-east may actually start to subside offsetting some of the upside potential and increasing some of the downside risk.  It is not so much that they are bearish, I just have a feeling they believe the current amount of upside potential is not worth the risk of the position.  Rumors are they still see big upside potential in soybeans, but closing and recommending that investors take profits in their positions certainly add downside pressure. 

 

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