The Morning Vibe

Posted by Nogger - a legend in his own mind at 09:21 | Categorized as

30/03/12 -- Heavy fund liquidation saw corn take a bit of a pasting last night. The May 12 close of USD6.04 was within 3/4 cent of session lows. Indeed front month corn has only closed lower than this twice this year, and aside from a brief period below USD6/bu in late November through to mid-December, there were only four other days in the whole of 2011 when corn was lower than this.

I read this morning that funds have exited around 80,000 Chicago corn contracts this month and corn is down 70c, or 10%, from it's March 13 high.

Meanwhile as of last Tuesday they were long 211,000 soybean futures & options contracts. In mid-December, when the market bottomed, they were long just 8,000 lots. Soybeans are up USD2.50 during this time.

Either they are exceptionally good at reading things, or the weight of their money, whether coming in or getting out, is unable to be easily absorbed by the combined might of the other market participants.

I know which one my money is on!

So we now all sit and wait for the USDA's latest offerings, yet predicting the fund's next move seems more important than studying the fundamentals these days.