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Corn and Beans--How high?
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buck10
Posted 2/25/2007 12:01 (#110744 - in reply to #110662)
Subject: RE: Funds long 360,000 contracts.


I wouldn't be all that worried about long fund positions in the corn market. Actually IMO the market has become very stable. The extreme long funds are in balance with the extreme short postions held by the large commercials.
The good carry to July - Sept.....and the hope of basis appreciation has most grain merchandisers hedged and holding the corn... The funds will have ready made buyers for their long liquidation in that time period as most of this corn needs to get moved before new crop starts to be harvested and stored... If the carryout will truly be only 750,000,000 those last bushels could get expensive for end users...basis in August in some spot markets may become explosive as the last of these bushels are moved to the final end users...Now please don't misunderstand me..in the day to day trade, volatility could get wild ...especially when these crazy funds show up at 1:10 pm with 4 or 5,000 contracts to buy or sell....So in summary IMO the commercials will be there to mitigate the effect of any fund liquidation as long they don't all sell at once.... It is in both the commercials and the funds best interest that this liquidation is done in the most orderly manner possible...

Just a corn farmer caught in the middle of this battle..
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