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Hi, My name is Justin and I‘m with Commodity Trading Research, today were reviewing our recently published article…

Grain Prices Jump- More Gains To Come?

Grain Prices Rally- Still Room To Profit?

What a month for grain prices…

Corn, wheat, and soybeans have all experienced strong rallies the past few weeks. Corn is up a whopping 21.9% in

the past month, while wheat and soybeans are up 14.2% and 9.5%

respectively.

Take a look…

What’s sending these commodities higher?

Mother Nature is providing too much of a good thing…

Parts of Midwestern US have received copious rainfall the past few weeks. While rain is generally welcomed by

farmers, too much of it is a bad thing. It’s so wet in parts of Indiana, Illinois,

Missouri, and Ohio that many corn and soybean fields arenow inundated.

According to a recent United States Department of Agriculture (USDA) crop progress report, a larger than expected percentage of corn crops are in “poor”

condition due to flooded fields.

What’s more, soybean plantings are behind schedule as compared to 2014. As of July 5th, 2015 96% of the US soybean crop was planted. Last year at this time 100% of the soybean crop was already in

the ground.

The excess rain has investors worried corn and soybean yields won’t come in nearly as high as previously forecast by

the USDA.

This weather uncertainty is precisely why grain prices are on the upswing.

Now the question every grain investor is asking is- “Does this rally have more

room to run?”

Here’s the deal…

The sharp late June early July rally is likely due to rampant short covering

instead of new buyers coming into the market. You see, grains were heavily

shorted earlier in the year as traders bet on an ample grain inventories in the 2015

crop year.

With that outcome now in question, bearish investors are begrudgingly

throwing in the towel.

So, just how much upside is left in grains?

Here’s my take…

In last Friday’s monthly crop production report the USDA said it expects 13.53

billion bushels of corn to be produced by US farmers this season. That’s down

from the 13.63 billion bushels the government agency expected in June.

And while the USDA left corn yield estimates the same at 166.8 bushels/acre, most analysts expect a slightly reduced

yield estimate in next month’s report. The same goes for soybeans.

Clearly, there’s a bullish thesis for additional upside in corn and soybeans…

However,I’m wary of getting long grains at current levels.

With grain’s recent gains coming primarily fromaggressive short covering, further

upside will likely be much harder to come by. In fact, I suspect any additional rallies

in corn and soybeans will berather mild compared to the advance of the past few

weeks.

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