For those in southern Ontario who have yet to plant an acre of corn, it’s like pouring lemon juice on a paper cut, but at first glance, the sprouting corn crop in the United States is looking very good.
Ranulph Glanville, chief market analyst at Grain Fox, said this early crop condition positive is having the expected effect on the corn market, dragging it down. According to the first USDA crop condition report of the year, 75% of the U.S. corn crop is in good to excellent condition. Only 4% is currently rated poor to very poor, and 25% has yet to emerge.
Adding to the bearish mood are short selling positions held by funds. “Funds don’t make the market, but they can move the market in the short term,” says Granville, and that’s exactly what’s happening now.
But in the medium to long term, changes in Russian supply and other factors are also at play, so it’s not all doom and gloom, and people shouldn’t remain overly bearish on the corn market, Granville said.
But when the market starts to rise again, don’t wait around hoping for a pricing opportunity to hit the high of the last bull market, Granville says, because the chances of getting there are very slim. Home runs are much lower than strikeouts in this market. Selling in disciplined increments when margins are positive is a good plan, even if it’s not the most exciting.
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