The corn market has acted like the hero in a bad science fiction movie over the last few months, breaking free of a monster's attack only to turn the corn and encounter yet another nightmare. In the case of corn, outside markets are the evil force lurking in the shadows, ready to strike at a moment's notice.
To be sure, corn appeared to be winning the battle for a time last week. Ideas farmers will be hard-pressed to plant corn next spring, sent prices on a tear, with nearby March scoring a test of $4 after rallying almost a dollar a bushel. Alas, the monster returned, this time in the form of a stronger dollar and plunging energy prices, sending futures back down to support at their old resistance line. Corn held, but not before moving decisively back below its 50-day moving average.
The trouble for corn is more than just outside markets. Old crop stocks are on the rise, and are likely to increase further due to slumping exports. The only potentially bullish force on the horizon that could rescue 2008 crop prices is USDA's Jan. 12 supply and demand report.