July Corn Fills Gap

Published on: 17:10PM Jun 18, 2013

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It was another strong day for new crop corn as the corn-soybean ratio continues to retrace from recent highs.  December corn closed 12 cents higher at $5.50 ½, November soybeans up 4 ¼ cents at 12.89 ¾, and July wheat up 7 cents at $6.87 ½.

Most of today’ strength was concentrated in the new crop which means this move may be associated with corn-soybean spread repositioning.  It could also be large funds rolling July longs up to December corn and November soybeans.  Otherwise the weather and daily news headlines did not appear to be dramatic enough to justify today’s spread action.  Technically the July corn contract filled its gap from the March 31st report today at $6.76 which may be the reason there was heavy resistance above that level.

July Corn Futures

July Corn

Once December corn got through the 50 day moving average it quickly made its way up to the 100 day moving average as the chart below shows.

December Corn Futures Red Line = 50 Day Moving Average Blue Line = 100 Day Moving Average

December Corn

Here is a chart of the new crop corn-bean ratio retracing from the highs.  This makes sense since corn acres are expected to be lower while bean acres are expected to rise on the next report.

November Soybeans/December Corn

November Soybeans/December Corn

We are staying hedged using a combination of cash sales, futures, and put spreads.  As a reminder the July CBOT options go off the board on Friday, June 21st.  Please contact us if you would like a second opinion of your hedge protection.  Have a great week!

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EHedger is a premier full service commodity brokerage offering risk management services for the agricultural sector as well as professional traders.
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