Volatility Running Rampant in Corn Market

Traders uncertain if move higher is the real thing.

For a dead cat bounce, last week's rally in the corn market had plenty of life. But with volatility swirling around world of commodities and currencies, it was hard to tell whether the move higher was real or just a correction in a bear market.

To be sure, traders remain nervous about the final size of the 2008 crop, despite USDA's first, optimistic assessment in its August report. Crop ratings and satellite images showed a little bit of deterioration in the latest week, and the top end of yields may have been cut by the recent trend towards drier conditions. The Mississippi RiverValley did see some rains last week, but showers in most other areas again were light — if anything fell at all. The remnants of Tropical Storm Fay could crop some good rains into Ohio later in the week, but overall the rest of the Corn Belt should see only light showers this week. Temperatures will be cool, which may or may not be a good thing, before heating up next week in front of a trough that could bring better chances for precipitation.

The impact from this weather outlook was magnified by still more craziness in outside markets. To read the full review on corn, click HERE.

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