Death comes to us all. Life's but a walking shadow | I was really curious as to how what the Commitment of traders would show following two full weeks since the rally had started to collapse. This past data period where the new crop corn price has declined a full 20 cents shows what might be described as stagnated market as far as changes in open interest. As expected producers stopped selling and endusers/merchants added a little to their long positions but Managed Money and the other speculators didn't seem to really respond in a determined manner. You can't really say that the speculators tried to sell the market down. It's almost as if the market just drifted down due to neglect. If that's the case almost anything could potentially spark a rally.
I suspect that the traders are waiting for the crop tour and some definitive word about potential yields both East and West. I'm still thinking that Ill, Ind and Ohio will post a mediocre crop so it all comes down to whether Iowa and Minn. can compensate for that or not. Last year we had a 14.2 billion crop on 83 (+/-) million acres harvested. This year we're scheduled to harvest 13.6 billion on 81 million acres harvested. The current $3.70 price will not begin to ration current and near term and the recent rally didn't last long enough to slow usage as well.
And as for the bigger picture, corn exports are strong despite the dollar, a bird flu vaccine is available, PED is more or less under control, cattle on feed placements are strong, gasoline consumption is stronger than it has been since 2007, unemployment is down, people are working and wages are starting to rise. All of this suggests that despite the constant negativity corn is being used and will continue to be used at a good clip. If this year's harvest comes in significantly less than 13.6 billion the carryout and the supply will per force shrink.
For what it's worth.
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COT of traders new crop corn.
