Is the rally over?
Has the big rally in corn and soybeans come to an end?
Market analyst Darin Newsom doesn’t think so.
“Technically, we saw some short-term bearish patterns established Monday—the beginning of the week, the beginning of the month,” Newsom says. “Does this really mean it’s all over. No.”
Newsom says, technically, he is more concerned about soybeans than he is corn.
“Because we did have an inverted forward curve on that, and those tend to collapse. They just don’t hold themselves up very well.”
Newsom says, fundamentally, rains in Brazil are also weighing on the market.
As for corn, he says the fundamentals are still strong.
“We’ve still got strong basis. We’ve still got bullish futures spreads. So if we see a normal sell-off here, I think it’s going to be controlled somewhat by the continued bullishness of the fundamentals.”
Newsom says USDA has overestimated corn stocks over the past four years and, in his words, “that’s kind of coming home to roost, at this point”.