For the past month, the weather and corresponding crop size has been the driver of the grain markets in a big way. Unfortunately, just not the way you probably hoped for. The wind of cycles, technicals, and dollar weakness has been taken over by the tempest of the largest grain crop ever grown. Nobody has fear anymore that we are going to run out of grain. That is the story, and it is really all you need to know. The fundamentals under the grain markets are horrible.
That said, I have a recommendation of how to manage any existing long futures positions, should you happen to hold any. I began recommending this on Friday. Allow me to explain the logic by beginning with the dollar.
Sell your losing corn positions, and move the margin money to oil. The margin for an oil contract is $3200, which is roughly double the margin for corn which is $1400. If you own 4 corn contracts, roll them into two oil contracts. The oil will not have to withstand the fundamental pressures which will help depress corn prices.
An oil contract is 1,000 barrels. Every penny oil moves is worth $10. By contrast, a typical corn contract is 5,000 bushels. A penny move is worth $50. What you need to determine is how many pennies of potential are left in your commodity to see if this will work. If corn moves back to $4.00 from where we are today, it will need to rally .84 cents which will be worth $4,200 per contract. For oil to make a move worth $4200, it will only need to go up $4.20. That would have oil only back to around $50.50 That would be my recommendation.