Calculating Value in The Corn Market

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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 years 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. Lets take a look at the current technical condition of December Corn futures.

December 18 Corn - Futures

Chart provided by QST

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My many years of trading futures markets does make a difference. Feel free to call or email me if you have any questions. I can be reached at 312.242.7990 and at blake.robben@archerfinancials.com.

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