late june corn retreat
Well the drift downward in corn is still underway. It'll be interesting to see how things pan out with the balance of the growing season. Historically, we're likely to have one rally in corn but that's obviously not a given. With the consistent pattern as of late of weather premium being removed from the corn market, I'm seriously beginning to question if perhaps too much of that premium has been factored out. It seems like a lot of the downward pressure we've seen lately is due almost as much to the loss of popularity of commodities since the cooling off of gold and crude as it is to the ideal growing conditions thus far. As many will repeat to themselves while holding longs "there's still a lot of growing season left."True, but the odds are shifting to the bears for the seasonal drift lower to be sooner rather than later. I'd personally like to be around for any readditions of weather premium to the corn market, but the December contract is now getting close to that key 249 price area. Drifting much below that barrier would almost certainly cause some degree of a tailspin and massive long liquidation. Though... it may very well turn out that we are in the midst of a perfect buying opportunity. The market will likely be reluctant to break that key support barrier... of course there are never any guarantees. One thing is for sure, this market presents an interesting opportunity for entry into a potential weather market on the long side with the ability to set a tight stop below key support.
The Friday, June 30 numbers will likely be market movers (even if the market ends up in the same place it started).
posted by jared @ 9:09 PM
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