$5 Corn: See the Moving Parts that Pushed Us There
Mar 07, 2014
Corn prices for old-crop surge above $5.00 per bushels on continued strong demand, heavy technical buying and short-side covering. Money-flowing back into commodities, looking for either a "weather" type hedge or "geo-political" hedge in light of Putin's latest move into Ukraine, continues to propel the trade higher. As I stated late last week, and again Monday morning, move out of the way as the bulls run by! For the moment the dynamics, at least on a macro scale, have dramatically changed. Make certain you are NOT exclusively focused on the S&D's...there are simply many more moving parts to consider these days. Producers should remain on the sideline, waiting for even higher prices before making additional sales. Spec's should remain cautious in trying to pick the highs in this environment. Click here for my daily report...
Weather traders are keeping a close eye on the recent El Niño "watch" for the summer of 2014 that was issued yesterday by the NOAA yesterday. The NOAA is saying, "A significant downwelling oceanic Kelvin wave increased the oceanic heat content and produced large positive subsurface temperature anomalies across the central and east-central Pacific. In addition, toward the end of the month, strong low-level westerly winds re-appeared over the western equatorial Pacific." To summarize, "All models predict warming in the tropical Pacific, but there is considerable uncertainty as to whether El Niño will develop during the summer or fall. If westerly winds continue to emerge in the western equatorial Pacific, the development of El Niño would become more likely." Otherwise the NOAA will maintain their "neutral" stance. From how I understand it, the conditions appear to be right for an El Niño event to come our direction either this summer or this coming fall. But since the longer-term models can change so quickly there is still some big uncertainty...best bet still looks to be flipping a coin. Click Here for my daily report!