Saturday, June 27, 2015
How High Are Corn Prices Going?
Corn futures are trading above their 20 and 100 day moving average forming a triple bottom in Monday’s trade around the 3.65 level, however I’m still sitting on the sidelines as the chart structure is absolutely horrific at the current time as the 10 day low is almost $.40 away which does not meet my criteria to enter, however I’m certainly not recommending any type of short position as that would be countertrend trading.
Traders are awaiting next Tuesday’s USDA acres report which will show estimates lowering uncertainty in this market because at the current time estimates are around 89 million acres but nobody really knows what the report will state due to the wet conditions especially in the state of Iowa so expect high volatility next week. Tuesday will give us some type of estimate of what production could be and if you are a farmer as I’ve talked about in previous blogs if prices were 4.25/4.50 I would definitely take advantage of that situation and sell your cash crop due to the fact that carryover levels are extremely high as there’s no supply problems despite this weather scare.
As I write this article in central Illinois the corn crop here is outstanding and is already about 4 feet tall green and lush so this is only affecting certain areas of the Midwest but as a speculator sit on the sidelines and wait for better chart structure to develop. TREND: HIGHER--CHART STRUCTURE: POOR
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