AM Comments 7/29/15
Wednesday, July 29, 2015, 8:07 AM
Submitted by: Eric Kist
After opening higher during last night’s trading session, both corn and beans have drifted lower into the morning break in action. After reaching the highest board prices since the turn of the new calendar year, the past two weeks of market action has sent prices tumbling lower, as December corn futures have dropped 75 cents over the past two weeks, and November bean futures have lost over a dollar on the board. Perhaps even more nauseating is the fact that managed money funds still hold considerable long positions, despite the slide in prices. As of last night, it was estimated that funds are long over 200k contracts of corn, and nearly 60k contracts of beans. If fund managers decide to sell off their positions and take profits (perhaps as the end of the month is approaching?), things could turn from bad to worse for grain prices.
Weather is still at the forefront of most speculative trading decisions, but as an estimated 80% of the U.S. corn crop has reached pollination stage, severe weather risk is beginning to ease in regards to corn. Weather will continue to be the major input for soybean prices going forward, as weather during the month of August will be crucial for ultimate yield potential.
U.S. monetary policy is being discussed today by the Federal Open Markets Committee (the Federal Reserve), and upon the conclusion of today’s meeting the markets will be searching for any possible hints for future interest rate hikes. Many believe that Fed Chairwoman Janet Yellen is leaning towards September of this year for a possible rate hike.
Corn: 3-5 lower
Have a great day!