Corn Futures Retreat from 10-Month Highs

Once the outlook of a drought ridden rally in corn futures may curb demand, corn futures plummeted from a ten-month high.  The commodity users/makers of ethanol, feed and food all have concerns about buying at such high corn prices.

The commodity producer’s concerns are valid: ethanol output fell to the lowest amount in the last two years, the USDA has predicted meat/poultry output is less than last year, and corn (futures) prices are more than 40% higher since just mid-June.

Ethanol production and a cut out in feed demand were the reasons for the (USDA) cut.  Even with these revisions by the USDA, we still feel that their yield numbers will continue to shrink over the next couple of weeks with the weather heating up and lack of rain in the forecast, this may just be a short term move down in the market,” stated Chris Hildebrand, vice-president of trading for HighGround Trading Group in Chicago, regarding the current corn futures situation.

I have been bullish the grain markets – especially corn futures & soybean futures – since earlier this year, but they have only broken out of their doldrums in just the last month.  I am only looking to go long corn futures on a further pull back, or when a low-risk opportunity presents itself.

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