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| Notice the commercial shorts peaked at the time corn price did in Jan 10'. It's something I am increasingly watching after a very good friend has commented about the correlation of increasing comm. shorts and higher prices that will follow. Notice the longs exited around the same time. Today comm. shorts are still increasing.
Many things are different to me than 2009/10. We are not expecting the govt. to add yield or acres. Both are steady to declining by recent information. Global production has peaked with Russia issues (for the time being). SA will have a slightly smaller crop. US is predicted to have a smaller crop that overall production is more vulnerable to weather issues taking US ending stocks much lower. (Remember we were the cool spot on the globe in 14', not much chance of that again with the polar vortex gone)
I don't see a large decline in prices in Jan. but we need a correction at some point. Corn prices have to be above $4.50 to keep acres close to steady. USDA says 88mil and 167 yield or 13.5 production. 6-7 bu below this year! Good luck. 160 with any kind of heat will be tops and that gives a 13bil crop. Barely enough to keep the pipeline full. I'm sure not overly bearish price yet. | |
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'09/ 14 corn price comparisons (cont.)
