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Position Monitor
 '07 crop '08 crop

Cash-only: 60% 25%

Hedgers (cash sales): 60% 25%
Futures/Options 0% 0%

GAME PLAN: Corn could face seasonal price pressure as harvest activity accelerates and storage fills up. If your yields are stronger than anticipated, sell the "excess" bushels off the combine. But there should be better pricing opportunities after harvest is done if you have storage and don't need to make sales. Therefore, no additional 2007- or 2008-crop sales are advised at this time.

Fundamental analysis

Corn futures quickly reversed course to start the new month as wheat and soybeans endured a sharp corrective pullback. With yields remaining strong, corn is susceptible to near-term harvest pressure. So far, corn futures have avoided heavy seasonal pressure and basis has held up much better than expected. But with record supplies hitting the market, risk remains that heavy pressure will be felt in both futures and the cash market. Until the bulk of harvest is complete, the upside is limited for corn futures unless wheat and soybeans provide strong spillover support. A heavy wave of fresh speculative buyer interest in the grain markets would favor corn as a value buy. But funds must be encouraged to actively buy corn given the fundamental picture is currently not highly bullish.

Daily December Corn

Trend is choppy.

Futures must fill the Oct. 2 chart gap at $3.68 to negate the island top formation and signal a short-term low is in place. The September high of $3.89 1/2 is resistance when that gap is filled.

The island top formation signaled a short-term top and points futures to a near-term test of the bottom of the summer trading range at $3.24 1/2.

Average Corn Basis

Total Corn Export Bookings

Daily March '08 Corn

Trend is choppy.

Near-term resistance lies at the boundaries of the island top formation at $3.84 3/4 and $4.04 3/4.

The island top formation points futures to a test of support at $3.40.
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Publication:Pro Farmer
Date:Oct 6, 2007
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