New Podcast | We just released a new podcast. We go over the rally in corn, why we think corn and soybeans will be range bound in the short term, and the problem $4.00 Dec 18 Corn futures creates with respect to next year’s corn acres. We also dive into hogs, cattle, and crude oil. Click here to listen to Turner’s Take Podcast
MACRO NEWS | Some big news today for the currency markets. The Aussie Dollar is lower today as inflation was reported much lower than expected. The British Pound is higher after their GDP rose higher than expected. The Canadian Dollar is lower after their central bank held rates steady. All of this was contrary to expectations and have lead to moves in these currencies by 1% or more. The US Dollar has held relatively steady.
CORN | Corn traded 10+ higher from their lows on Friday and Monday and it is turning into a big deal with grain traders. On one hand I agree, it is nice to see and can be considered a good move higher. On the other hand I remember a few years ago where nickel moves were a daily occurrence. It is nice to see corn get some buying support. Funds are short covering but we are seeing new money come in and buy the corn market as open interest is higher on this rally. I think $3.45 is seen as a good value point for corn and that has helped set the floor for the time being. South American weather and US corn exports are going to determine if $3.45 holds.
I think the top of the range could be $3.60 to $3.65. If we the futures can get that high I think we see a lot of selling pressure. Don’t forget we still have a lot of corn in the US. Over 2.3 billion bushels are projected for 2017-18 carryout. There is no shortage of corn. Now that we are in the thick of harvest a rally, I expect any rally into the $3.60s to see a lot of selling pressure.
CRUDE OIL | I am still a bear on Crude when we trade into the $50s. The OPEC agreement ends in March 18, when crude gets this high we see more production from US shale sources, the funds are already very long, and momentum is waning on the charts. I like finding ways to get a small short position on. There is a bear spread in MRCI – selling Jan against May – that I have been writing about in Turner’s Take Market Alert.
Continuous Crude Oil
Jan/May Crude Oil Spread
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