The corn market hasn't had much to cheer about lately, and likely still is not out of the woods. But bulls got at least a little respite on Friday, when prices were able to rally after this week's break below $4 by December futures.
To be sure, corn, like most of the commodities, followed the stock market on Friday, making it vulnerable to another wave of selling. But there's at least some sense on Wall Street that stocks are in the process of bottoming, which could start to bring stability to the futures market.
Downside risk remains, however. Whether this comes from stocks, or from what's likely to be a prolonged recession, the result would be the same — a break to the $3.25 level for nearby corn. Until the corn market breaks the grip of hedge and index fund selling, rallies should be only short covering in nature.
Open interest in corn continues to deteriorate and the funds are forced out of their positions. For hedge funds, which are on the verge of a net short position for the first time since 2006, it's not so much bearishness as it is forced liquidation. To read Bryce Knorr's complete weekly corn review, click HERE.