Corn: Corn attempted to follow Friday’s trade with some light selling Monday. That selling was slowed by some light buying seen in corn directly and also support from both the bean and wheat markets.
While there was nothing wrong with Friday’s weekly sales report, it was a slowdown from what has been seen over the last few weeks. Trade is now estimating that the fund position in corn is long around 55,000 contracts. This number is slightly less than their estimate last week, but in the grand scheme of things, any long position under 100,000 contracts is negligible and still does not prove that funds intend to build a major long position like 2012 or 2008. While fund money is still coming into this market, the bulls should continue to go for the ride but it is still too early to assume a year long corn buying program.
On the flip side, bears can find chart resistance levels to sell at as long as they keep risk limited until corn can find at least three days of light selling. Hedgers that have held patient to this point might want to use current levels close to 470 chart resistance as a place to consider getting some sales started. Those looking back to 2009 (the last time funds were “neutral”), December topped out around 470, which also makes this a level to hedge. Click here to read more and connect with Allendale Inc.