It's been a long time since corn growers endured a year filled with fear and frustration like 2008. From wild optimism to outright despair, farmers saw it all. And as the final days of the year count down, things aren't getting any easier.
Just getting the crop out of the field is proving to be a major challenge. Fortunately, conditions are forecast to improve this week, with the next storms looking like they'll hold off until Thanksgiving weekend.
The markets are just as frustrating. Corn seemed ready to rally on several occasions last week, only to see gains snuffed out by losses in the stock market and energy complex. Deep concerns about the health of the global economy remain an anchor around the corn trade.
The impact of outside markets is two-fold. First, speculative hedge funds, and to a lesser extent, index funds, continue to liquidate their holdings in commodities. Nervous investors who poured billions into hedge funds have given notice they want their money back. Getting out of a hedge fund isn't like selling shares of a mutual fund or stock; instead, advance notice must be given, and redemptions are only done once a quarter or so. Those who want to get their money out by the end of the year in many cases had until last weekend to give notice. Meanwhile, as the stock market sinks, pensions and endowments with a fixed percentage allocation to commodities must sell their index funds to stay within their boards' guidelines.
At times last week, open interest appeared to be increasing, so interest in commodities remains. That's where the second impact of outside forces comes in. Worries about the health of the global economy spark fears of slowing demand.