Corn bears are deeply considering the fact the U.S. weather forecast is showing many large production areas will see smooth and clear sailing ahead for the combines. Keep in mind, we are clearly ahead of last years pace, which produced a record yield. My point is there might soon be a bit more "weather risk" coming out of the market.
I doubt a lot of risk is removed, especially when you consider several in the trade believe the USDA might reduce their production estimate in the upcoming October 9th report. I suspect if the bulls don't see the reduction they're looking for inside the USDA data some might throw in the towel, especially if we can't complete the breakout pattern on the charts up above $3.95.
In other words, if you need to reduce more nearby risk, make sure you know and understand the horse you're betting on. If the USDA comes in with a bullish number, I suspect we breakout to the upside and make a run toward $4.20. Without a strong bullish number from the USDA in the October report, the bulls may feel some disappointment, hence we are probably at the upper end of our nearby range.
Unfortunately, I think there's going to be talk of more corn acres both in South American and here in the U.S. in the weeks ahead, so I'm not looking for any help coming from that front. In fact, I continue to contend the next realistic shot at higher prices, without the help of an aggressively bullish USDA number, might not occur until late 2015 or early 2016. Therefore if you have the extra bushels and need the cash-flow make certain you are factoring in all of the variables and dynamics currently in play.
This market may get extremely boring and mundane after the October report as weather becomes somewhat of a non-event. In simple terms, the market may again start it's "death by a thousand paper cuts" march and slowly grind lower. As producers we've learned through the years that these "slow deaths," or should I say slowly grinding lower prices, are often the most psychologically challenging and painful to sit through. Make certain you are mentally preparing yourself or taking the appropriate actions to avoid the struggles. I continue to believe best practice is to keep all hedges in place.