Corn Short, Technical, Fundamental and COT Analysis Current Corn Short
Entered originally, and admittedly prematurely, when we saw price touch the 61.8% fib retracement level.
Entered a short position last month as price has been steadily falling since June last year.
The falling price of corn is being caused by simply an overabundance of supply, and a lack of increased demand.
On the supply side, we have seen Corn acreage in the USA increase by ~10%.
At the same time, Brazil has also been growing record amounts of corn.
One of the factors which lead to Corns high in 2022 was the Russo-Ukrainian war and Ukraine's inability to export their produce. This is simply not the case anymore, as of now, Ukrainian exports have begun to pick back up to pre-invasion levels.
Demand has failed to increase with these pro-supply events.
Over the past four years we have seen American cattle herds, who are the largest consumers of Corn, slowly shrinking to lows not seen since the 50s. This is mostly due to an increase in local droughts which have made it harder to graze cattle, a preferable alternative to cattle feed due to the cheaper costs. This has caused the overall demands for Corn to shrink as there are less cattle overall to consume Corn and Corn products due to the drought.
Non-Commercial traders, as can be seen through COT filings, are a majority short Corn.
528,280 short positions are currently held by Non-Coms vs 295,676 longs.
Latest COT filings do show a slight increase in Net Positions (Longs-Shorts) compared to the previous. Possibly due to profit taking by Non-Commercials.
My Entry was based on Technical analysis, mostly an apparent Fib retracement. I saw price close in the "Golden Zone" on the 27th of Feb and as I am heavily Bearish on Corn, took it as an opportunity to enter short.
This entry was rather early and if I am closed, with my SL at 4.208, I will look to re-enter at a later date.
