The corn market continues to roll. The focus this week has been more related to the new crop. The old crop has not failed, however the July Dec spread has given back approx 30 cents of its inverse. The domestic carry is a feature, of course, as the stocks to usage are supportive. The most friendly aspect of the market in my opinion remains the Brazilian second crop. This is important because further reductions to the crop could lead to a longer window for the US exports. This could have a lasting impact on the domestic carry. It is my thought that there will be further reductions and the markets will be supported. The spreads are a question mark as I am not sure at present if the market will switch focus to the new crop. The main point here tonight is that the corn market, although elevated, has reason to be so. The near term high price could use a break to clean up the global price difference. I dont know if it will happen however. As always quantify your risk. As I suggested yesterday, risk is elevated.
John J. Walsh
President, Walsh Trading, Inc.
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