Corn Rally Begins

As I suggested on Friday, corn is moving higher out of the coil which had been forming for weeks.   Corn is headed back to revisit February highs at a minimum.

This has the potential to be a big mover.  The COT Data shows that commercial hedgers are holding nearly 100,000.  When hedgers become net long to an extreme degree, we should be looking for pries to rise. 

The other driver of this rally is the dollar which is seeking out its 3 year cycle low as I suggested would happen last summer.  The dollar is into its blood bath phase which will mark the end of this three year cycle.  At any other time in the year, this would be a key element on grain price movement.  This rally however would probably be occurring without the help of the dollar.  The Dollar certainly has not helped soybeans.

It would not surprise me if we have a spike like we have had the past two summers that will take corn to $4.20 or even $4.40.  If we reach those levels, I will be recommending the sale of most of the corn crop.  When the dollar finds the bottom, it will begin a new 3 year cycle.  It will then have a very strong rebound for the next year which will pressure all commodities.  It will pressure corn also once this seasonal rally is completed. This might be the last great chance we will have to sell $4.00 corn for a while.