Corn Prices Likely to Retest Highs

June 27, 2016 12:00 PM
Corn Prices Likely to Retest Highs

By some estimates, funds recently have pulled upward of 80,000 contracts off the long side of the corn market, says Chip Flory, editorial director, Pro Farmer. But that doesn’t mean corn prices are going to keep heading lower.

“Now we see, how does the market recover?” explains Brian Grete, editor of Pro Farmer, in an interview for “AgDay” TV. “We get to the June 30 reports, then we have the Fourth of July, then we’ve got summer weather. Where does that take us? History says that when you have these sharp pullbacks after a big move up, you’re probably going to retest those highs at some point in time in a weather market.”

It doesn’t help this past week featured a mix of factors including moderating temperatures and rolling rains across the Corn Belt.  That could all change, though, if temperatures heat up.

“I think short-term we could see even more of a pullback here if the funds decide to get out of more long positions and lighten up a little bit more there—or a lot more there,” Grete says. “From thereon, though, if those long-term forecasts are accurate and we do see the above-normal temperatures, that is potentially damaging to corn yields and as a result we could see some upward price movement.”

Summer price volatility is “probably going to be close to off the carts,” Grete predicts, and $5 corn remains a possibility under the right set of circumstances.

“You push above $4.50, you get an upside breakout above there, and now you’re talking about the potential for $5 [just on the fund money getting long],” Grete says. “We may see a similar type of situation happen as we did near $4.50 if we get to $5.”

Click the play button below to watch the complete interview with Grete.

Want more video news? Watch it on AgDay.
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Spell Check

Mission, KS
6/30/2016 11:37 AM

  USDA reports and weather forecasts are out. Dec corn has dropped 28 in 2 days, making this headline look like a bad joke. Looks like Grete forgot about acreage and its effects on the market. Don't think I'll be following him

Waterloo, IA
6/28/2016 12:06 PM

  Hmmmm chip looks good now that the forecast changes every 15 minutes

smith , WA
6/29/2016 12:21 AM

  Hope you're right. There's just nothing available of any decent size (100 acres or more). Everything is in real "strong hands" and "tight hands" as they say.' I am waiting and hoping.


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