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Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
Corn bears are talking about the healthy jump in ethanol stocks the past two weeks. Believe it or not, ethanol stocks are now higher than they were last year. Bulls on the other hand are now trying to build a case for more risk-premium on dryness concerns in Brazil. For the past few weeks I have heard nothing but talk about how good the safrhina (second-crop) corn in Brazil was looking, now all of a sudden there are a few more bullish headlines popping up. Before you get overly excited about the dry conditions in Brazil, keep in mind a large portion of the second-crop corn is already past the pollination phase, so I'm not real sure how much "damage" will actually be done. My bet right now is it won't be enough to rally prices (still somewhere between 70-72MMTs) but it could help keep prices supported until more is known about the US crop. Especially with the "uncertainties" still surrounding the pace of planting and total number of corn acres. Technical traders continue to look for signs of a market top. Several thinking if we close below $5.00 in the JUL14 contract it could signal to the trade that a Spring "TOP" has been formed, in turn we may start to see more forced long liquidation. Until then I suspect "weather" will remain the main driving force... I'm thinking that might change next week as several areas see improvement. Continue to monitor the forecasts. CLICK HERE for my daily report....
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