12 Years Ago
It was in 2008 in Feb, when the Mar contract was trading mid 70s, as notice approached. This was the first notice period since the floor was closed, and no one was aware that all hell was about to break loose. Mar began its rocket-shot in mid Feb, jumping from 76c to a synthetic price of 110c, by 5 Mar. Futures locked limit routinely, and traders were forced to use options to cover shorts or do any kind of hedging. Basis went from -600 to -2000, and resulted in bankruptcies and closures of many small, medium and even large firms. Closing the floor abruptly caused chaos in this industry, and no one ever paid a price for such a colossal error. A lot of good people, and old, old companies, left voluntarily or by financial bludgeoning.
The false move to 110c with no fundamental reason, and basis explosion, were largely the reason for the move later that year to trade a low of 37c in Nov. Price was extended and exacerbated in both directions.
Option expiration will match off against futures on tomorrow's runs, so we can get a look at open interest.
Another "all-in" day of togetherness. Positive news for another vaccine boosted the stock market to a record close, and the $ obliged by trading a little lower. On a long weekend drive over 200 miles of Delta cotton areas, not a single field was seen not harvested. It will be most interesting to see how NASS calls the weekly crop progress, as we can verify 99% of Mississippi and Louisiana are done. Ark is probably +95%, Tenn at 90%, and MO at 90%. Cert stocks are now +100 kb, and carry reached 88% Dec to Mar. Every contract this market year has partial carry. The invert between July 21 and Dec 21 is impossible to justify.
There are a couple Fib counts coming up, both falling on the same day. A 13 count from the low of 11/02 hits 11/19, and a 34 count from the low of 10/05 is same day. That day is just one or two days prior to a seasonal low, due avg day 11/21. But there is a much larger event that falls perfectly on a 144 month Fib count. This month is exactly 12 years after the multi-year low of 3670 in Dec 2008, and that low stands as the lowest price in 18 years. The Dec 08 contract made its low on 11/12. 2020 Dec will have little historical significance, as it is grinding through a mundane, and uneventful period prior to notice.