100,000 Three Times
About that volume yesterday of some 100k. Here are 3 other days in which volume traded at or near that level, and the events. May 30, 2018, vol = 101k, price had risen from a low of 8336 on 5/15, to a high of 9640. Price dropped to 83c by July notice. May 15, 2017, vol = 107k, price rose from a low of 7617 on 5/11, to 8718. Price then dropped to a low of 71c by July notice. Price rose from 108c on 10/18/2010 to 157.23c on Nov 10, then fell to 111c on 11/23. Nothing is ever the same, but history does seem to rhyme, if not repeat exactly.
Chart below shows a scatter and a polynomial curve of actual futures annual highs against end stocks ratio. This year's pinch point is 85c and 23%. Note that it falls directly on the curve. This would normally be a good indicator of a theoretical high, in not for the dismally low R sq at only 27%. But still, it does say something.
This market has swallowed a pretty big cut in end stocks, so a trader must ponder if price has fully accounted for that. And, he must ponder what happens if the 1/2 Mb cut does not appear. Then there is that spike in volume, and if one is still bullish at 85c, he has to be a little spooked by history. We last tried a short at 77c Mar, and were quickly booted. Since then spread trading has been profitable, but meager. And yesterday, the 3rd recommendation to hedge into new crop was made. Our prices for 10% hedge each are: 73c, 77c, and 81c. No matter what one's opinion on the market, a planter has huge risk +80c, as that price represents a whopping $150/b above loan. And we would not argue if a farmer wanted to hedge more +80c. As for a spec trade, lets try another bear option. A May 100 Call can be sold for roughly same price as a 78 Put. Or, the safer route is to buy a May 80 Put for about $1100.
All 4 leading contracts have achieved Fib % gains from last spring's major low. Using this week's high vs the spring low, March is 8489/5164 = 164%. May is 8596/5300 = 162%. July is 8700/5300 = 161%. Dec is 8140/5405 = 150%. These Fib ratios line up nicely with time counts mentioned yesterday. If the 3rd leg up is the same day count as the first 2 legs, the ideal day falls on Tue, for 67 days. The spike in volume is one more indicator to be alert for major top.