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| Looking at a weekly chart there is a package of resistance above this week's highs. This presents a near term hurdle.
Except I can feel the winds of change.
Let us first take a gander at the commercials.
The domestic boys are licking their chops. The basis in several areas is weak translating to a money machine, provided they don't screw it up.
On the other side, the folks who look out the window in wait for cargoes to hitch up to the dock....they are beginning to wonder...their mental wheels are beginning to grind.
Ever watch a chicken make a decision?
It will stand on one foot, peek around, then move a bit, stand on the other foot...gets nervous.....at this moment whether a wheat user, corn user or DDGS user or an uncovered SBM user...(Importers)...they are in what I call the "chicken freeze position"--CFP ..they are thinking 'maybe they should be doing something, but what? Greenhouse weather....rain makes grain ....watching Rotterdam corn values, since June, is pretty much like watching paint dry.
Good traders can make timely decisions and live with the consequences & may reverse themselves within a matter of a day or two. Point is, the ability to pull the trigger. I call it the Firing Line.
In most successful export trading companies, the boys at the top have experience on the Firing Line. The same for many of the successful Hedge Funds.
BUT...when you get into these multi-national firms...it can be a different story. From experience in making presentations to Fortune 500 firms (on behalf of lower level VP's on the Firing Line and of a wish for more authority) --it can be an entirely different decision making process. Generally a couple of fellows on the Board are impatient to head to the bar, a couple have mistresses stashed downtown and are impatient...(those boys care less about the subject on the table)...a few of the others are afraid of the responsibility and most of them simply do not understand how markets function. In addition, in some industries the price of corn can move 50 cents & not affect their bottom line...(called adding value) -- Therefore, they either approve or disapprove...usually they approve upon the condition of waiting for more government information.
Therein lies the OCCASIONAL IMPORTANCE OF USDA reports. Users of ag commodities have been complacent. The wheat situation is a wake-up call to some of the smarter ones. If we reduce wheat supplies a bit, & IF THE CORN YIELD IS NOT HUGE...it could be gangbusters. In some of the developing countries folks buy their food daily...in small quantities...when their income justifies the purchase of two meals a day instead of just one and a few million mouths are affected....it adds up.
I remain of the opinion the risk is on the upside...our corn exports are above target....next season will be the same.
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Can Dec corn breakout?
