This article is brought to you by:
CONSENSUS
ROSENTHAL COLLINS GROUP, LLC
144 2nd Avenue North, Nashville, Tennessee
877-853-2202(March 30, 2000) CORN: Traders who were banking on the much publicized "drought of 2000" were dealt a "knockout punch" this week when the National Weather Service issued a wetter forecast throughout the Corn Belt for the next several days. This put the market in a "tailspin" that caused prices to plummet over seven cents on Tuesday. The most threatening factor facing the market at this point is the size of the long position held by funds. According to the most recent Commitment of Traders report, they are currently long 385 M.B. of corn, including options. If normal growing conditions develop this spring and summer, then they will be forced to abandon their positions which will put prices under intense pressure. Later this week the USDA will release the Grain Stocks and Planting Intentions report which will set the tone of the trade for the next several weeks. More than likely it will show producers intend to plant more acres of corn than was anticipated a few weeks ago, but it may still be slightly below last year. If this is the case and there are no adverse weather developments, then ending stocks will likely be close to 1.5-1.7 B.B. Export inspections were better than expected at 39.6 M.B. and above the average to reach USDA's target of 1.950 B.B. Cumulative totals are running 10 percent above last year and shipments have already reached 54 percent of projected exports. Sales totaled 780,400 tons, 47 percent above the previous week. Last week's comments mentioned July corn needed to hold 237.5 to keep the outlook intact for a rally to 252 around the end of the month. Prices fell to 232.75 this week which means the advance that began December 13 at 209 probably ended on March 17 at 249.5. The weekly chart shows an important top has occurred as well. If this is the case, then a recovery from this week's low should stall at 243-246 around April 5. The seasonal pattern indicates prices topping the first week of April and remaining weak until the end of the month. Provided the market does not exceed 249.5, the odds favor a decline to 225 with a bottom likely around May 3. December corn is due a recovery to 259-261. However, unless 264.25 is exceeded, a sell-off near 240-238 may develop with a bottom likely during the same period as the July contract. At this point in time, it will be completely in the hands of Mother Nature for future price direction. If the publicized drought of 2000 "fizzles," then a decline below the contract low at 225.25 may develop.
Dewey Strickler
Hosted by:
CONSENSUS, INC. AND INVESTORS
CO-OP
1737 McGee
Kansas City, MO 64108
(816) 471-3862