| It simply takes a look at the WSJ to see that November Soybeans futures
have gone from about $4.50 to about $8.50 the last time I looked.
However, who has that money to play with or if something goes really
bad who has room for 10,000 bushels of soybeans in their backyard!
dave
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| > It simply takes a look at the WSJ to see that November Soybeans futures
> have gone from about $4.50 to about $8.50 the last time I looked.
Actually it's more correct to say about $5.75 to about $7.50 which
ain't much for common stocks but is A LOT ($8750 less $35 commission)
in the futures biz.
> However, who has that money to play with or if something goes really
> bad who has room for 10,000 bushels of soybeans in their backyard!
YOU do! Prior to about two weeks ago the bean margin was $950, but
with all the recent volatility they've upped the margins to $2400 or
so per contract. Margin is not a purchase cost, just money you have to
leave with your broker to debit losses and hopefully credit wins.
As far as bushels of beans in your backyard, rest assured that is an
old stockbroker's tale, probably designed to scare you off futures much
like kids stories make them afraid of the dark. In the drought of 1988
I took delivery of 10,000 bushels of oats...which amounted to an extra
$100 of paperwork and $70 commission. Nothing showed up at my house,
nor would it have -- "delivery" is paperwork. Oh yeah, I had a days'
worth of storage charges too...maybe $25.
That said, beans are pretty volatile. Everyone who phoned his broker
with a market order to buy beans this morning ended up losing $1,000
per contract on the day. The pit locals made out like bandits. Corn
ran much the same story, except corn moves about 1/3rd of beans so is
less volatile and needs less margin.
One market letter, written by a grizzled RICH old veteran who will remain
nameless, says the upcoming August 11th USDA Crop Report will show FAR
less bean acreage than the market expects, with a strong move expected.
On the other hand, my charting service recently announced, in effect,
HEY GUYS! COMMERCIAL INTERESTS ARE HEAVILY NET SHORT GOLD AND SOYBEANS!
Meaning the Strong Hands expect prices to decline; the producers have
sold their product but the consumers have not yet bought. Since these
folks ARE the market ultimately, they tend to be on the right side
of things. 'Course a dry August and early frost would make liars of them.
You can buy or sell with equal ease ... all ya gotta do is decide what
direction the market will take.
John
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| > On the other hand, my charting service recently announced, in effect,
> HEY GUYS! COMMERCIAL INTERESTS ARE HEAVILY NET SHORT GOLD AND SOYBEANS!
> Meaning the Strong Hands expect prices to decline; the producers have
> sold their product but the consumers have not yet bought.
Since the close of business the day that note was entered, sellers of
gold have netted $1600 and sellers of beans netted $3000. Per contract.
Buyers would have lost the same amount.
John
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| RE: Note 531.3 by VMSDEV::HALLYB "Fish have no concept of fire"
> On the other hand, my charting service recently announced, in effect,
OKay, so tell us more about this charting service.
|