23 February 2024

Weekly AgTwitter Recap (WATR)

Why are we still talking about this?

There is no such thing as a dumb question, only dumb predictions…

Never mind, dumb questions, too.

This is unsurprising as Reddit prepares to IPO at 1/3 of 2021’s valuation. Here is a story of how they will sell everything to AI. This IPO could be a mess, keep an eye on it.

There is no bigger waste of time than debating Brazil’s crop size on X. Kudos to whoever wrote this.

1) The market is forward-looking and has moved on. If you have global production modeling, maybe this matters a little.

2) There will be no real confidence about the actual size of the crop until October or later when we have objective crush and export data.

Brazil’s soybean association is talking their farmers’ book at 135 mmt. They made a colossal mistake and are doubling down. Cargill is talking their short-bought cash book at 163 mmt. The industry is playing chicken; it says nothing about the crop size.

Here is our post from November 2, 2023. Experts are just guessing. Talking on the phone or doing a “crop tour” in 2024 is the equivalent of the old “mimicking the survey model” that became obsolete a decade ago.

“Let’s snail mail surveys like in the 80s; then wait weeks. Trust me, mobile devices and machine learning are useless for this process.” -signed the experts at the time

Cattle are so back! Wait, the math just seems off…

Cattle market can’t do math or have nice things…

The Call of the Week: Cocoa Tops

Everyone runs to where the action is. Newsletter writers, social media stars, and, most of all, traders. Calling a bull market correctly can make a career. Just look at how one correct call in the 1970s allowed Dennis Gartman to tell the same story for decades while recommending absurd trades and long-dead commodity thematics.

“Yes, Dennis, I do want to try my hand at lumber in Yen terms. The similarities between the Chinese investment cycle and inflationary pulse following the Yom Kippur War are striking.”

We can reduce risk by using options —> Black Scholes = Free $$$

It’s unfair to pick on Brian here because calling a top (or even the next $500) on cocoa is nearly impossible (it looked like a great call initially). The takeaway is going against your own rules of trading because it will make a splash on social media is a recipe for disaster. Put this on the trader’s tombstone beside, “but I was right.”

We showed that this situation had no good solution a few weeks back due to the long-term underinvestment and massive speculative interest. We said, “The exchange may have to step in.” These situations rarely go in your favor. Look at how the court ruled after the LME bailed out a Chinese Nickel Tycoon. This is a disgrace.

If you have no business in a market, just stay away. Enjoy the fireworks 💥💥💥 Ditto on NVDA!

Why can’t women have astrology when men believe in politically motivated freight blockades?

At the time of writing, it does look like there are about 52k bots that do support the boycott ⬆️

Remember about social media…

People posting never think they are wrong. Farmers do not actively wish each other harm. Social media brings out the worst in people because it fosters an environment totally lacking in empathy. When we interact in real life, we remind ourselves we will see this person again at work or a school event. We behave differently online, and not usually for the better.

We don’t watch MSM, we don’t line up our sawdust, and we don’t make angry political posts. Life is just better this way.

Rather than American politics, we follow Brazil’s lead. Watching Brazilians farm reminds us, we are not all cut out for #WildBrazil. This is one of the great #AgTwitter accounts @StaLuziaEsteio

Oh 🌽 🌽 🌽 , how could you?

Tell me you're a grain guy branching into macro for clicks without telling me. For future reference, The Kobeissi Letter is always a dead giveaway. To be fair, Andrey was not wrong!