Thursday, July 12, 2012

Commercial Traders Selling Corn Rally

Commitment of Traders Report Shows Heavy Selling in Corn Futures.

Commercial traders shed 23% of position ahead of WASDE report.

July 12, 2012

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There’s no question the corn crop will struggle to meet the market’s expectations. Early calls are for a national yield now aproaching 145 bushels per acre. Furthermore, much of the record acreage planted is in marginal land with little hope for good production in anything but perfect weather.
Despite the bullish fundamentals, commercial traders in the grain markets were clear in their intentions of getting forward delivereies sold ahead of the WASDE report. Their selling intensified in the last week of the rally. They sold 27,000 corn futures contracts as the market consolidated. Will this form an island top and gap lower leaving small specs and funds to bail out of their long positions? I would expect the market to fall far enough to close the gap left from July 3rd, at least.

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