Bubble Boys

Soybeans are trying to rally into the teens for the first time. Hiding in plain site are the bubble boys whose insightful trading skills brought about the sub-prime disaster. Now the same creative crowd marches in single file in the soybean aisle at Bubbleland. At least a fundamental case can be made at times in a transparent analysis against soybean consumption and the resulting carry-over supply. But either way it usually results in a 'gaming' of the carry-over number. Some years 300 million bu carryover is enough, sometimes 100 million bu is enough. The greater fool theory here is played using the China card, which is the ultimately the face of global consumption. Reasoning, if China needs just a little more, that equals a lot more. Further, if South America or the US cannot continue to produce great crops one after the other, the supply rationing will justify the current squeeze higher. So the bubble boys are betting that somewhere in the near future the production machine will slip up and save the current price bubble. Good luck. These price constructs always end with the same guys shouldering the heavy weight of trade ideas grown old. Remember that commodity markets have a habit of making illiquidity an art form when comes time to head south.