We got a pretty bearish number at first glance on Thursday. We are showing great yields on USDA at 165 bu. We probably would have sold off, if it were not for the funds. The funds are getting a huge huge position long. This week they have gotten long again.
This upcoming week we need to watch Corn. If we settle above 4.30 next week we could accelerate back up to the 5.60 level. Right back to the resistance levels from last year. Technically, there is a flat bottom triangle. The mouth of the triangle is 1.30 wide. If you add that to the 4.30 breakout, that projects up to 5.60.
Funds in the last 8 days have bought 80k more contracts of corn. If they get a hold of the contract, and wrestle this corn from the commercial grain users, they could really run with it. The commercials are currently vulnerable. Like a a wolf pack taking down an elk, if they get it on the right way, they will nail it. That would mean a rally fueled by increasing volume on up side moves.
So, we are on a precipice of opportunity in the corn. A move next week to settle above 4.30 for the week, is extremely bullish. Funds will add to that winner like no body’s business.
If, and here is the catch, If, we turn around and head lower, the funds will be trapped, with little room to get out of this massive long position. If their sell order stops are triggered, it could be ugly.
Therein lies the mystery and the reward of the markets.
Have a great weekend.
