Corn up, beans down and a cold burst over the Midwest!
Dec 09, 2009
Good day from frigid Midwest. Temps are going to be 10 to 15 degrees below normal as the northern cold moves across the Midwest. This is going to bring some serious snow which should delay shipments for a day or so. The positive side of the equation is the wet fields are now going to freeze up and allow some much needed harvest in many parts of the Corn Belt.
The corn market bounced today off the recent weakness. I don’t see this as a start of any long-term trend reversal. In fact with the weak cash market trend and potential for continued harvest pressure I would not be surprised to see a little more weakness in the market as we head into the end of month and end of year trading.
Please note: if the market does correct 10 to 15 cents more, it will be set up for a very solid first of year price bounce as many trading funds enact their first of year portfolio realignments. The numbers that I’m hearing are very big, the only issue is most of the trade knows about the realignment. So will it be the old bullish report/bearish reaction situation. We would strongly recommend catch-up sellers in the corn complex try to sell close to the recent highs if at all possible.
In regards to the bean market, many have been talking about a retest of the old highs above $11 as a near term objective. The problem beans are having is near term exports have been solid which is the bull side of the equation. At the same time all indications are the South American crop is off to a solid start which is bearish. We continue to side with the argument that once we get into the next year beans will start to lose their bullish luster. Our concern still resides with getting a floor in the 2010 bean market with a base price as close to $10 but with significant upside potential if any type of weather event hits the global suppliers.
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