Corn Still Has Upside

Make no mistake in believing that corn is finished.  After a historically high crop ratings report this week, corn m oved limit down and has since reached the 50% fib retracement.  This move was a profit taking event by the big money speculators and not a weather event as you might think.  I had warned on June 13 that money flows were at extreme levels as large money speculators had pretty much handed their longs over to the small guys.

I have contended all along that the rally in the grains was caused by massive money flows into the commodity space.  Oil is up nearly 100% off the lows back in February, and money has leaked into all other commodities as well, including grains.  Just as this run up in price which began before the crop was even planted was caused by "smart money" traders, so has this sell off.  We are only 1 week into pollination season and we have a historically high crop rating?  The only way the rating can go from here realistically is lower.... prices higher.

My recommendation, if you followed my earlier recommendation would be to lift your $4.45 hedge at $4.05, netting you .40 cents on the trade.  If you have contracted a HTA at an elevator, you could buy the position back on the board.  On a 25% position, this gives you an extra .10 cents on your entire crop.  I believe volatility, weather, deteriorating crop conditions and a falling dollar will give us another shot at $4.45.