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Corn Continues to Battle Expectations

Published on: 16:23PM Jun 16, 2010
The corn market continues to battle between the expectation of a great crop as confirmed by the weekly crop conditions versus the Chinese buying and concerns of too much rain affecting yields. This has caught corn in a narrow trading range, but has helped to lift beans because of concern that the last 9% or so are having difficulty getting planted. Plus, some of the crop needs to be replanted due to weather concerns.
In periods like this, I like to look at the charts for some orientation as to what we may expect in front of us. The chart below is an overlay of several of the last few years with the current price action. As you can see, the pattern is for the market to lose steam rather significantly as we move into July for the corn complex. While I’m bearish for corn into the fall, I do believe the market could hang around much like the 2008 top. The other observation is the lows should be confirmed by early October. So waiting for harvest to be completed is no longer a good strategy.
 
 
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However, for corn, my big concerns are the acreage report due out the end of the month is going to be bearish and the big farmer who is holding positions that must be moved before the new crop. Both situations place a lot of burden on the corn bulls. Subsequently, I strongly suggest an 8¢ to 12¢ rally over the next 10 days must be aggressively sold for all producers. 
Bottom line: If you do not move inventory now, you are holding all the way to next summer!

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