Special Market Update
Grain Market Commentary
Monday, June 12, 2017
By Ryan Zinnel, Account Representative, The Andersons
Last week was a prime example of a summer weather rally. The hot, dry forecast sparked this rally and the fund short position liquidated 60k contracts as of last Tuesday. We gained 20 cents in a week but did give back 8 cents today. Most of today’s correction is related to the extend rain forecast.
As of Tuesday, the funds were short 138k contracts of corn. From Tuesday to Friday, December corn rallied another 10 cents which should have spurred more short covering. With the funds likely short approximately 100,000 contracts as of Friday and the extended weather forecast back to reasonable temperatures and areas of good precipitation, the market volatility should settle.
Going forward, all eyes will look at the weather forecast, planted acres and crop conditions. As you can see from last week’s move, it is a good idea to keep open opens working and take advantage of min/max opportunities to make sure we maximize the market rallies. We still have plenty of domestic and world supplies of corn, beans and wheat so without a serious weather threat, prices will remain in the recent trading range.