The market is racing and Corn needs a tune up!
May 30, 2014
The "demand" pistons are firing but we're simply not getting any bullish combustion out of the "production" side of the engine. The "technicians" are worried if we continue to run this race with massive misfires we may do more permanent damage to the charts.
In other words we need to hold the new-crop DEC14 contract above the $4.50 to $4.60 area if we have any nearby hopes of an early summer weather rally. As for the old-crop JUL14 contract, yesterday's "inside" day on the charts and recent consolidation has a few traders looking for a brief breakout in one direction or the other within the next few sessions. Strong weekly export sales may give us a little knee-jerk reaction to the upside, but it feels to me like the "demand" story is old news and the trade is more interested in nearly ideal weather and thoughts of a record US yield reaching 169 to perhaps 170 bushels per acre.
The eastern part of the Corn Belt had a terrific production year last year, while the western portion of the belt had fouled out here and there. From what I am hearing, there is starting to be a stronger chance that both the Eastern and Western producers could end up firing on all cylinders for the first time in a long time... Certainly something to consider!
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