Any Hope Left for a Corn Rally?
Jun 20, 2017
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Corn has been under a significant amount of pressure to start the week mostly due to a better weather forecast. By the end of the day on Tuesday corn was almost 20 cents off the high and right back into the range it had traded from March to early June. Is there still any hope for a corn rally?
On Friday corn finished strong managing take back most of the losses from earlier inthe week.The large speculators had all but gotten out of their large short position and corn was in position to challenge recent highs. However, better rains over the weekend and wetter longer term forecasts has put corn under pressure since the markets opened on Sunday night. The speculators have started selling again and corn is now testing key trend-line support.
On Monday afternoon the USDA NASS updated Crop Progress which saw very little change in corn conditions. Good to Excellent conditions remained unchanged at 67% however 2% moved from the good category to excellent. The Poor to Very Poor category was completely unchanged at 8%. While the subtle move in the good to excellent category does improve the overall crop score it really is marginal at best.
It is interesting that after a good week of weather the corn crop did not improve more, especially the crop in the very poor, poor and fair categories. Maybe there was not enough time after needed rains to show up in the crop. Could this mean there will be a bigger improvement next week or is this suggesting that there has been damage done to the crop that rain will not fix?
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Last week I posted a Vegetation Health Index (year over year) map and it was showing sharp declines in health compared to last year. This was not only due to heat and lack of rain, but also likely lingering results of earlier flooding rains as well. This week's VHI, which is updated as of Saturday June 17th, shows conditions worsening in key growing areas. Again, there may not have been enough time to realize improvement on the map. Or, there could be something else going on.
I have heard and seen a few examples of very good corn so far this year. However, the majority of what I have seen and heard about is less than ideal. There is a lot of corn (that I have seen) in IL and IN that will most likely be nowhere near "knee high by the 4th of July". The reality is that in the last few years it has been "waist high by the 4th of July". Now, this may not mean that we will not have a good corn crop this year, but I have my doubts. It will be very interesting to see what the corn crop (and markets) look like in a few weeks.
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Give us a call if you would like more info on the strategies we are using or if you would like to set up an account to put a plan in action. Ted Seifried - (312) 277-0113. Also, feel free to give me a call or shoot me an email if you would like to talk about your marketing plan, the markets, weather, or just to visit.Follow me on twitter @thetedspread if you like.
JulyCorn Daily chart:
JulySoybeans Daily chart:
Producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.
In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent. Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs. Be safe!
Ted Seifried (312) 277-0113 or email@example.com
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