"It's like farming [corn] in hell!" ... sell the new news here?

Ok, we get it - it's bad out there. But might we see an end to this monster rally, i.e. is this hellish news priced in? I would say 'yes', but I'd add this caveat: unless the heat wave continues!

While not anticipating much-needed rain, temperatures have cooled off since the weekend when 100 degrees+ gave way to temps in the 80s. Now consider:

  • Appetite for planting corn this year was unmatched: US farmers planted the most acreage ever.
  • The USDA has reported a steady decline in corn export sales.
  • Sluggish gasoline demand is reducing demand for, and production of, corn-based ethanol.

It may not make sense to get super anxious here and start selling, but there is potential we see the monthly USDA report mark a ceiling, more or less, in the price of corn. That's not to say a sharp downturn is imminent, since prices will probably try to push even higher first. 

Commodities Essential. 9 July 2012

Trade Essentials.

No new recommendations or adjustments at this time.