Overnight, December Corn was up 3 ¾ cents at $3.34 ¼. The crop condition remained at 68% good to excellent from the previous week. The weather is reported as spectacular for growing corn. It is expected that we may have one of the largest corn crops in history if the weather stays like this. The all important crop report comes out tomorrow morning, when the USDA is supposed to make some corrections to last month’s report. Specifically, they will reduce amount of the planted acreage of corn down somewhat from the sudden extra 3 million acres planted that they reported last month. For now, it appears that the only thing that will give corn a strong boost in price would be a threat of an early frost. The directional movement indicators are still bearish. I recommend standing aside in Corn until after tomorrow’s report.

Producers should be short many contracts or own many put options or option spreads in corn for hedging purposes at this time looking for prices to test and probably go below $3.00.

Aug. 11, 2009
David Hall