Commentary: The corn was a bit of an inversion to beans today. The old crop stocks were 2098 bil bu. Smaller than anticipated.
While the new crop was estimated at 3318 bil bu. The old crop offered support today with the market trading up 5 cents. The funds are (approx) short 200 t bu. This coupled with the fact the Chinese have been buyers of corn gave the market the incentive to rally. The question now is will the funds be quick to limit exposure and exit positions or play defense. This can be a difficult time of year for shorts. Also, will the Chinese continue purchases of corn and for what time frame. The President has made it clear he does not support a renegotiation in the agreements recently signed. With respect to the new crop, The USDA assumes a 11 bu to the acre increase as well as 8 million additional acres. Both of which remain to be realized. While lofty aspirations are often met, many times they are not.
John J. Walsh
President, Walsh Trading, Inc.
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