Corn futures are getting absolutely trashed this morning…along with basically everything else in the commodities sector.
The USDA also reported soybean stocks down 12%, while wheat stocks are up 118% from a month earlier. Wheat and soybeans are also down on the report…beans down only half a percent though, so a decent performance in the wake of the carnage.
This looks like another “all or nothing” day in the markets – with the dollar and T-bonds up, and everything else down. We’ve been keeping an eye on this lack of decoupling
…and I think we can assume it hasn’t happened yet.
Notable performances in the commodity sector today by rough rice and orange juice…the only green ticks amidst a sea of red. Keep an eye on these two, as strong performances on down days can imply good things to come.
I wouldn’t interpret this as a nail in the coffin of the bull market in agriculture – more likely just a respite for this year. The old saying is that if corn doesn’t rally by July 4th, it’s not going to happen.
We still appear, though, to be playing a game of Russian Roulette with the food supply – we basically need a bumper crop every year to keep this cheap food party going. Grain supplies remain near record lows
, so the 2010 grain contracts may be an interesting speculation in the near future…or perhaps right now.
Puking up corn chunks…right past the line of support.
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