Posted 10/13/2021 05:20 (#9266101) Subject: Dec 22 corn
As i think about the corn market, am i bullish or bearish? Neither really as i stay pragmatic and fight off my own biases. I was born bullish so i always look at things from that lense but the pragmatic part of me asks this question …. If im an enduser of corn either domestically or internationally am i concerned about greatly higher prices? After yesterdays report i would have to answer no. Usda printed a 1.5 billion bushel carry out. What would shrink that cushion over the next 8 months until the safrina crop gets harvested. Well a couple of things could china demand beyond usda forecast, safrina crop is bad, exteme lower acres in the states due to cost of production relative to beans, and probably a few others im overlooking, but those risks seem mitigated. So i look to the charts for a bit of guidance. There just doesnt seem to be any upward pressure on price like i was seeing last year.
There is divergence with price on both the rsi and the macd as noted by the red lines. The macd looks to be rolling over as circled in yellow. Recent price action met the uml. It just seems like path of least resistance has now shifted lower. If this is the case, and in dont know if it is or not, there will be basis opportunities because farmers are bullish by nature and dont like selling into lower prices until we have to. Time will tell. Its a much worse business situation to turn 5 dollar corn into 4 dollar corn than it is to miss selling 6 dollar corn because you sold 5 dollar corn.