Today is a very key day after yesterday’s bullish crop progress reports…
Last night corn was not able to take out last week highs and soybeans only made a new high by 2 1/2 cents before both faltering. First of the month highs could’ve occurred as the reality of production losses is now becoming widely known, as it even made national news last night at 5:30.
What is being missed and why corn is stalling out at the 450 multi-year resistance, is that we are also losing massive amounts of demand on this rally as well. Production losses are likely 1.5 billion or higher, but just before the low was made in May, there was consideration that the USDA was going to lower the export side on corn again by 100 Mil Bu.. and that was when corn was at 350… Imagine what 450 corn is going to do to demand.
Corn at 450 over the last several years represents a carry out of over a billion bushels and with a US dollar in its present strength area. Demand has probably been slashed by 300 to 500 Mil Bu, as South American corn crops are being increased in size. Exports look to be aggressive out of there.
Bottom line is today’s close is going to determine if 450 is it for the time being while we walk through a June 12 crop report next week. Plantings will advance rapidly this week. And the first correction in this fast rising market is now probably going to continue for a while with a close over 455 Dec corn and 925 November beans required to start another leg up. Look for consolidation. We have made new crop sales into this present rally.