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Calculating Value in the Corn Market

by Archer Financial Services | Jun 13, 2018
By Blake Robben
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The combination of fund selling and perfect growing conditions is causing the corn market to make new swing lows. Now, a few market participants are eyeing a 180 bushel yield on 88 million planted acres, therefore, ending stocks would come in at 1.818 billion bushels, down 364 million bushels from last year’s 2.182 billion bushels. That represents a 16.6% decline. Also, December 17 Corn went off the board at $3.36. If we simply take 16.6% of 3.36, which is 55 cents and add that to 3.36 our final number would be $3.91. As I see it we are currently at fair value. Furthermore, the critical pollination period starts in the last week of June through the first two weeks of July, so traders must pay attention to future weather with the potential of yield destruction. Let’s take a look at the current technical condition of December Corn futures. 

December 18 Corn - Futures

Corn Chart

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Phone: 312.242.7990 
Email: Blake.Robben@archerfinancials.com


Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The risk of loss in trading futures and options can be substantial. Past results are not indicative of future results or performance. The views and opinions expressed in this letter are those of the author and do not reflect the views of ADM Investor Services, Inc. or its staff. Research analyst does not currently maintain positions in the commodities specified within this report. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
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