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Rangebound

Agriculture.com Staff 05/24/2007 @ 1:52pm

The corn market seems conflicted and so it stays in the same price range. Prices under $3.60 (for both the July and December contracts) are apparently too cheap, so the market seems to gravitate to something higher, right now around $3.75.

The large acreage and the fast planting pace during the first half of May definitely took the bullish edge off of prices. The drought in the Southeast (and possibly parts of the eastern Corn Belt) has reminded the market that there is a long summer ahead.

Trouble in the Southeast reinforces thoughts of shortages of cash corn in the July/August/September timeframe. Of course, some of this acreage is irrigated and is in good shape. Still, this early harvested corn is important to the market and will be necessary to supply feed needs in the southern states. Slow wheat harvest due to wet weather will only reinforce strong nearby cash markets.

There's also a certain longterm issue here. The corn market will need even more acres in the future. Farmers in the Southeast need to have a good experience growing corn so they consider growing it again in future years. So far this year, with the freeze and the drought, it's not going well!

The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial situation.

The corn market seems conflicted and so it stays in the same price range. Prices under $3.60 (for both the July and December contracts) are apparently too cheap, so the market seems to gravitate to something higher, right now around $3.75.

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