r e l a t i v e // strength

markets and news tuesday, july 25, 2006

More confirmation that we are in the midst of a buyer's market in real estate. August is likely to be a wild ride. We've had a cool down in gold that could easily reverse and re-ignite. Crude closed substantially lower. Corn has bumped up with beans lately because of lower than expected crop progress report (minor decline in good/excellent rating for corn, but 6% downgrade occurred in key growing state of Iowa). A bearish cattle on feed number Friday caused a sell-off Monday.

Lots of activity.

Corn did not stay in the low 250s for long (basis dec contract). Tonight were back up near 257 where there's significant resistance. The ever-expanding demand base for corn is likely to keep this thing alive. Fund long positions have been culled... should they reenter on the long side then we could see a rally along with the beans in August. Causative factors for corn may include:

• further increases in demand. Chinese import more than expected down the road.
• steeper declines in crop conditions that the market is factoring in
• re-establishment of longs by the funds
• hot and dry 10-day forecasts

Since we're almost out of the July "corn" window and moving into the bean window of August. The fireworks could be subdued, but remember that it was only a few weeks ago we were looking at 284 for dec corn. Support at 247.75 seems to have some fortitude. Only time will tell.

posted by jared @ 6:19 PM