We use the Commodity Futures Trading Commission Commitment of Traders report to generate daily buy and sell signals in the commodity futures markets and Exchange Traded Funds. Our analysis has been featured in many places online and in print and is disseminated nightly via the COT Signals, nightly email.
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.
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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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