Can US Corn stay Competitive Globally?
Jun 06, 2014
Corn traders are eager to see the next set of USDA numbers which are scheduled to be released next Wednesday. I however am not looking for many really changes and feel the bulls could be a bit disappointed. The bears are arguing the current export estimate of 1.9 million might need to eventually be adjusted lower, especially when you consider we are already seeing more global interest in cheaper supplies out of Argentina and Ukraine. There is also the argument that the current USDA yield of 165.2 bushels per acre is now too low in light of the recent rains and overall pace of planting. Personally I doubt the USDA makes a change to their current yield estimate, but it certainly does NOT feel like production is moving lower. Moral of the story, and with the theme of trying to keep it simple, it feels like there could be more bearish potential coming out of next weeks USDA report than there is bullish potential. The "technical" picture hasn't improved any either, as both old and new-crop contracts fell back below $4.50 for the first time in months. Techies are also pointing out that open-interst is increasing while prices are falling. This is NOT a winning combination as it tells us the break is not just simply due to long liquidation but NEW short's jumping on the bandwagon as well. My hunch is with the lows now well within striking distance ($4.35 vs. DEC14 contract) just $0.10 to $0.15 cents away, the bears won't be satisfied until they test the waters. Producers should continue to remain patient. Spec's looking to pick a "bottom" may get their opportunity next week. CLICK HERE for my daily report..