Corn producers and traders who who are making bullish type wagers ahead of this Friday's highly anticipated USDA report should have a very specific game plan in place for when and how to exit should the USDA deliver. My fear is even IF we get some type of bullish news, it could be short lived. You have longer-term bears that have been waiting for a rally as simply another opportunity to short the market; you have those who are spread "long corn vs. short beans" who may simply chose to take profits and exit; and you have those who were long corn outright going into the report, that will more than likely be taking profits on the bounce, as they become more worried that the crop condition surveys the next few weeks will start to show the corn crop slightly improving...NOT getting worse.
Point is there is very little on the radar screen in the way of bullish headlines that will keep us moving higher should we get the bullish report we are looking for. The forecast through early July looks good for a large majority of the Corn Belt. The good-to-excellent rating was bumped higher from 64% to 65% last week and it wouldn't surprise me to see another bounce higher this coming week. String a few of those together and the trade will be talking about the USDA raising yields back to the 158 level...certainly not cutting them. All of sudden traders then go from feeling there is more truth in the bulls argument of a sub-13-billion-bushel crop, to embracing the bears argument of a plus-14-billion-bushel crop. As I have been mentioning, this would not be a recipe for higher prices.
Just remember, more times than not the trade comes into this June report, thinking Santa (USDA) is going to deliver an early Christmas present. Unfortunately, more times than not the trade leaves extremely disappointed. In other words, hope for the best but make certain you are prepared for the worst. CLICK HERE to make certain you don't miss any of my information on Friday.