Corn continues to travel in a sideways channel at the upper end of our recent range between $3.60 and $3.80 as traders await Monday's USDA data. I seriously doubt there will be any major surprises, but with everyone thinking the crop is going to be bigger not smaller, the "wild pitch" would be some type of move by the USDA to lower total U.S. corn production.
In other words, I don't see the USDA surprising the trade with any type of bearish boost to their yield or production number; everybody is looking for it. Personally, unless something drastically changes, I think we trade between $3.40 and $3.90 from now through year-end. I feel we are slipping into a bit of vacuum, with very few headlines that have enough power to move the trade. Most all bearish news has been let out of the bag, and there simply isn't much in the way of big "demand" headlines or major production concerns with much bite, especially with over 70% of the US crop now out of the fields.
Some traders are starting to ask questions about South American weather, but I'm afraid those concerns are going to take a bit longer to play themselves out. In addition, it seems like any early downside adjustments by the USDA to South America will more than likely be offset by larger production estimates out of the U.S. and Europe.
Bottom-line: I'm just not seeing any type of traditional fundamental news that is going to rock the boat in either direction. My guess is any major movement in price will be more macro and money-flow related. This obviously makes me a bit more nervous, as both are much more difficult to predict. With this in mind, I've started to focus more attention as of late on reducing a bit more of our estimated 2015 production. I think it's smart and advisable to be working with your personal advisor on strategies that can help you secure a $4.00 floor on a least a portion of your estimated 2015 crop.
The overall global landscape has drastically shifted in the past 90 days and there are some more extreme uncertainties: U.S. dollar racing to fresh new highs; the energy sector being turned upside down; precious metals getting hammered; and more hedge funds leaving the commodity space. Make certain you are not to close to the forest to see the trees. We still have risk ahead of us and we need to be doing our best to reduce our exposure. Have a plan...and execute!