Are corn lows in?
Aug 07, 2008
O.K. guys and gals, we are getting the weakness we want to buy on but if you’re a mere mortal it’s getting really difficult to buy in face of the daily price breaks. Yesterday’s correction in December corn down to the March panic low of $5.21 should be it! If we take out this level the next major support will not be seen until $4.80.
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All I can say is we are now moving the market down to critical support levels which should hold. If they are to be breached, I believe several things has to happen. First, we have to confirm in excess of a 154-bu. corn yield next week. I’m at Corn College this week and this is the best corn around. The bias I’m picking up is its good but we have forgotten about all the wet spots. The tone of producers is the combines are not going to find it when they start to run this fall.
The second thing I believe will have to happen is the continued long positions of the trading funds will have to be flushed. Concern about inflation is not over and they will continue to hold position. It should be noted that some of the recent sharp price declines has been due to large trading funds being forced to liquidate their entire commodity positions due to big losses.
Finally, the third thing that I believe must happen to force the market through major support levels is demand has to be confirmed as to being hurt more than the August report is suggesting. I’m hearing the feed wheat supplies are increasing and this could very well hurt corn exports.