Corn and beans are in the midst of a blow-off bottom.
The corn and bean crops are far from being made. This year has more “problem” crop areas and the weather forecasts are just as intimidating, if not more so, than last year at this time.
Last year, December 2021 corn made its June low on June 24th (today is June 23rd). On July 1st, December 2021 corn traded 97 cents higher than the June 24th low.
November beans traded at $12.59¾ on June 25th, 2021. On July first, November beans traded a $1.66 higher than the June 25th low.
Prices will recover very soon. Why?
The crops are not made.
Traders who have made a lot of money since last Thursday will take profit and that means a lot of buying to cover their shorts.
Basis clearly shows the futures were way too cheap last week!
There are two major USDA reports on June 30th: Acreage and Grain Inventory. No speculator short at these levels will stay short going into those reports. At these prices, the specs will be long going into those reports. Note than more than 95% of the futures trades are done by speculators.
This dip is a golden buying opportunity for anybody using corn or beans for short term profit. It is golden opportunity for those of you with corn or beans already priced to lift the hedge, buy a call or buy futures to offset your HTA sale and re-sell ion a week or two.
Do not misunderstand; even today's price will look incredibly high three months from now, But one week from now, they will look cheap.
Most importantly... relax. This is normal market action for this time of year.