That said am I willing to get Bearish at or below $3.40 per bushel in March corn futures?
No. And while I can’t specifically point to any current “smoking gun” that is fundamentally price supportive to corn futures, I do believe some weight should be given to the 10-year price seasonal, which does suggest higher prices after 12/4 (see below).
Furthermore, there are still a number of potentially supportive what-if’s surrounding the size and condition of Brazil’s safrinha corn crop, which won’t be known for several months. This will invariably have an impact on U.S. corn export shipments during the 2nd half of the 2016/17 crop year. And finally, as the market inches closer and closer to January 1st, I would not be surprised to see a money shift back into corn on the long side of the market from Index investors for the sole reason that corn is historically underpriced relative to its high-to-low futures trading range since 2007.
Patience will be required for Corn Bulls…
Thanks for reading.
Twitter: @MarcusLudtke
Author hedges corn futures and may have a position at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
Data References:
- USDA United States Department of Ag
- EIA Energy Information Association
- NASS National Agricultural Statistics Service
