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Well, the beat goes on in the corn market. This week saw spot corn values march 32 cents higher
on the back of a bullish stocks report from last week as well as the perception of a friendly USDA Supply and Demand Report on Friday. This past week saw the funds as aggressive buyers of corn. It can be argued that they were largely re-establishing long positions that were liquidated in the previous weeks.
Very little net fund activity was reported in both the soybeans and the wheat markets as of Tuesday. The corn strength to start the week was on follow through from last Thursday’s grain stocks report. There was little debate of the impact of the data from March 31st, however, today’s USDA Report was quite different.
Today’s report will not be remembered for the actual changes to the balance sheet, but for the rhetoric that followed. On the surface the report seemed neutral to negative as the carryover stocks were largely left unchanged. Yet some analysts were making the argument that it was a positive report as the USDA seems to have reached their minimum stocks figure and now must rely on prices to achieve the level of rationing that is necessary. That is the argument that won out today.
The attention will still be squarely on the weekly usage data, but as we move forward the weather will begin to grab a hold of the headlines. I expect that the corn market may be nearing a seasonal high early next week until a weather issue develops. Watch Friday’s lows as key levels in all of these markets as trigger points to be more aggressive with hedges.
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