- We have another “down” day with pricing boards exhibiting plenty of red numbers, signifying lower prices. Fund selling has been suggested as driven by Barclays, who have recently announced further job losses, exiting their long only fund. The bank’s selling has been noted across a number of commodity classes and the suggestion of source carries a degree of credibility with it.
- Selling pressure has left CBOT corn below the $7.00/bu mark, $6.80 (the early January low) looks to be a good support level right now. However, with what we believe to be a fundamental position which can only be described as bullish, the almost relentless selling pressure feels close to overdone right now.
- Cash buyers of corn are taking the opportunity to extend cover on the price break with farming sellers reluctant to commit volumes leaving cash basis strong. Our underlying view continues to be “buy the dips” and ensure cover levels, particularly on old crop positions, are not vulnerable to upward price spikes if they materialise.