Corn Futures Can Be HIgher on Low Reserves

Tomorrow it may be verified that US corn reserves are the lowest in over fifteen years when the USDA releases its monthly crop progress report.  This has the potential to both increase everyday food and fuel prices, as well as provide the beginnings of a strong summer trend.

The USDA could be expecting as much as 37%+ lower corn inventory than this time last year.  On another note, soybean inventories can also be expected to be forecasted less.

Chris Hildebrand, vice-president of trading at HighGround Trading Group in Chicago, stated this today regards the current corn futures situation, “Stocks are tight and the report tomorrow may further everyone’s expectations for higher prices going forward in the grain markets. Immediately we may have a move up and then a pause, but look to be a buyer on dips with a tight risk as this could be a good summer trend.”

The trend for corn futures is still technically “DOWN,” but higher highs than last week has the potential to change the trend back to upward.  Whichever way it decides to go, we just need follow-through direction to trade with a solid trend – we haven’t had these conditions since the end of last year.


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