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| Corn has been stuck trading in just a 20 cent range for over 2 months now.
If corn can break above those highs from the March USDA report ($4.60 for July corn) I could see us having some room to run higher in a heartbeat.
We have the funds are still short a massive amount. They’ve been holding a position that hasn’t made money in two months.
We are in that type of year where we typically rally. The next 1-2 months are going to be where we seasonally make sales or add protection to the downside.
There is going to be uncertainty in these markets and you are going to want to take advantage of it.
If you look at last year for example, we made our low in May 18th.
Then we rallied $1.00 for about a month.
Then the rally was over come June 21st. Just a month was all it took.
I am not saying we are going to rally $1.00 but look for a similar scenario to possibly play out this year where we make our lows here the next week or two because of planting progress.. and then we rally significantly.
I don’t know exactly if it will happen two weeks from now or two months from now, but a rally is coming. I could see us making our highs slightly later than we did last year based on factors such as how the summer forecasts look for July.
Be prepared for this rally when it happens.
Why do I see a rally?
Brazil corn could be a lot smaller. The carry in corn has evaporated. The May vs July Corn is just a 6 cent spread, it was 14 cents a week ago. We had zero deliveries on first notice day.
There is some demand behind this corn market, and if there is demand down here at these levels I don’t think that demand goes away.
The funds are going to be forced to cover and the farmer isn’t going to want to sell.
What happens every year is the farmer stops selling.. they get nervous that they oversold. Then they start buying it back. Then buyers get nervous that you aren’t going to raise it and they start buying it.
That is why we see a seasonal rally every year..
The shorter the funds are, more demand we create, and the longer the rally takes to happen.. the more room we have to upside….
Listen to the rest of todays audio to know exactly what you should be doing now and how to prepare for this seasonal rally before and after it happens
Listen Here: https://txt.so/bF5j2v
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How much will corn rally this May/June? Or won’t it? - Market comments
