Monday, July 15, 2013

It's hard to be bullish on corn

It's hard to be bullish on corn, particularly given the size of the crop we're almost certainly going to have. Yes, the crop went in the ground very late. Yes, that can mean a reduction yield. And yes, if an early frost were to occur, that may mean problems at the back end of the crop year.

But if those don't occur, given the fact that rain does make grain; given the fact that the crop finally did get into the ground in reasonable order; and given the very good growing conditions that have occurred in the past several weeks, you're going to have a huge corn crop. And we will not be able to use it.

The carryover next year is going to be egregiously high. I'm hard-pressed to think that that means anything other than lower prices. Moreover, the charts don't look bullish. The charts certainly look bearish.