Saudi Arabia moved oil down to $80 when they specifically stated that that level should be expected. The shale oil boom is finally having a significant impact on the supply/demand equation and the Saudis don't want to cut output by itself. OPEC still controls oil more than any two-bit bankers. Both oil and gas are falling, but nat gas storage levels are lower and winter is supposed to be cold again. The drop in nat gas sets up a seasonal play imo.
for USO. We'll see how oil does with Saudi Arabia keeping up full production and talking about $80 oil. OPEC might be testy at their next meeting. Shale oil is finally starting to impact US imports in a big way. Commodities have all dropped but it always seems like oil can defy logic (or is it OPEC can defy logic)? How are the oil production projections for Iraq doing? Doesn't seem to matter.
$30+ has always been a good level to start scaling in, and it should be again. Its just that Saudi Arabia is basically telling everyone to expect lower prices and prices probably stay under pressure until OPEC does something to cut production. Russia won't cut - they are desperate for dollars. US won't cut. Saudi Arabia is basically saying they won't cut either unless the cartel agrees to across the board cuts. I get the distinct feeling some hedge funds are also getting squeezed. Bottom line is this will undoubtedly be yet another opportunity to play lower oil prices, but I just think its still too early. Its playing out pretty fast, though, so I doubt there's much further to run.
We do know silver is a tiny market compared to gold where a big fish (like Warren Buffett) could easily buy up a one-year supply/inventory. We also saw the Hunt Brothers in '80. So yes, silver is more easy to see dramatic changes because a big fish in a small pond cam make a huge splash. Its not necessarily manipulation, but its a 'thin' market compared to gold, so silver is far more volatile over time.
Its been climbing a lot and is starting to look high. Long-term average is around 58, with a range that tends to stay in the 40 to 80 zone. Silver is starting to look cheap relative to gold, even though they tend to correlate up and down together as precious metals.
I doubt it. That was the 2008/2009 financial crisis. $15 or $14 is possible, though, before the next bounce.
when silver gets crushed. I always start with unlevered SLV but look at AGQ at times like now. Last low of $56, now at $46, and it could be heading for $36 ! But the high beta twenty point bounces are sweet.
Back to back bumper crops have crushed prices, but we might actually see some support around this level. Otherwise, the slide could continue into November. I just know we're getting a lot closer to the bottom as we near $3 a bushel corn.
What a break lower! Gold is the alpha dog of pm and gold is finally looking for a lower low. My guess is AGQ will offer some great upside once the dust settles. Best to let things play out before buying AGQ, though. Still a small position on unlevered SLV averaging down like a fool!
The marginal cost to harvest has to be less than the current spot price of corn. That's why farmers will harvest as always. The ones getting pinched first are the land renters with higher production costs. The low cost producers still do ok. Especially the ones who hedged by selling some of the harvest earlier at around $5 a bushel in the futures market. Corn traded between $2 and $3 a bushel for decades (on average) so a return to $3 a bushel shouldn't be too big of a surprise with back-to-back record harvests.
It could go to $15, but when everyone looks at the same price point target I somehow think we might not see it. I'll be looking at AGQ as well as SLV if we continue falling.
when silver gets crushed, but its too early with support totally broken. I always use unlevered SLV / PSLV at first, slowly accumulating, but when the dust settles from this drop, I bet AGQ will have a big move higher. Right now nobody wants to stand in front of this down-hill racer. Everyone is looking for $15, which makes me wonder if we don't get close before the next bounce. Might not see $15 with so many looking to buy there, but we could get close.
but we know the trend will eventually end. Corn keeps dropping towards $3 a bushel after hitting $8+ in 2012. I think we're rapidly approaching a bottom, but the short side has to play out first. Right now the downward momentum is brutal and we'll be swimming in corn soon.
There has already been a ton of downward pressure and calling bottoms in commodities is called guessing. My guess is we're near the bottom but probably not quite there yet. 2015 will see prices move around in the May - September growing season based on weather. Weather is always a wildcard. Tons of coffee was in storage and all the news was bad for pricing until Brazil experienced drought like weather and coffee doubled in a very short period of time. JO shot up from $20+ to $42. Grains have seen the same type of action. Weather is a wildcard, plain and simple, that can move prices a lot really quickly. That won't change.
The media tries to explain falling prices, and the expectation of a bumper crop fits the bill. As soon as prices start rising, they will try to explain that as well with a bullish story.
and silver gets crushed, I'll start spiking the punch bowl again with AGQ shares. When AGQ starts hitting new lows like right now, I start looking to buy little chunks, because the outsized bounces have always proved highly profitable (if scary) for me. Right now, silver (and finally gold) are both looking oversold and on the well smoked side, and with AGQ hitting new lows the stars are lining up again. Small, unlevered stake in SLV (added more at $18 today) but things are getting interesting now.
Trying to predict commodity prices has always been like throwing dice. It reminds me of coffee dropping to $1 a pound. JO got near $20. Then Brazil saw very dry conditions and JO pops to $42 in a very short period of time. Every bearish coffee report kept coming until the Brazil news hit, and then all those bearish reports meant nothing. This drop in corn/grains has been grueling over the past two years. My guess is we get spikes higher in 2015/2016 but this slide could last a while longer first. Slowly accumulating CORN and JJG on weakness down here. We could be swimming in corn soon!
I'll buy shares all the way down from here IF we see the $12s. I seriously doubt we see MANU with a market cap below $2 billion. The serious recent drop on the team's poor start and owners' secondary offering are creating opportunity imo. My guess is $14 and change is the best you could hope for realistically on this drop. MANU just has franchise power galore compared to the CLIPPERS!