Corn could start to see some firming price action in the coming weeks. Both fundamentals and technical are pointing to higher prices. Fundamentally, we are seeing tightening world ending stocks with Chinese production expected to decline by 12.5 million tonnes. Weather wise, we are expected to have a wet week ahead of us to further delay planting. Managed accounts are holding a massive short position, and if they get squeezed out of the shorts it will only exaggerate the rally. Producers should consider lifting hedges on short futures, while end users should consider establishing a hedge with calls at these low levels. I believe a 10% rally in prices is very realistic and traders should position to take advantage of that. Also, corn has yet to price in a weather premium. With the mild winter we had, I don’t think some 100 degree days in June are unlikely.  

Jul '17 Corn Daily Chart


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Frank D. Cholly

Senior Market Strategist

Frank has been involved in many aspects of the futures business, from taking and placing orders to providing high-quality order execution service. As a second-generation participant in markets at the Chicago Board of Trade, Frank spent his early years working in the Treasury bond pit servicing both institutional and retail clients. He then expanded his brokerage duties and began covering a wide range of markets, including stock index, metals, grains and the balance of the interest rate sector. Ultimately, he turned his full-time focus to the grain market, dealing primarily with proprietary and commercial business. Frank was a senior commodities broker at Lind-Waldock prior to joining RJO Futures in 2011.

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