Rumors of changes to the Renewable Fuel Standard (RFS) mandate last week shook up the markets Many question if the rumor is valid, because changing the mandate would require an act of Congress, which is not a guarantee or fast process. Regardless, this rumor is viewed as “uncertainty” to the market. With corn around $3.75, downside potential seems limited to between 25 and 50 cents, with upside potential high when weather, usage and acre potential are considered.
Funds will likely want to take advantage of this upside potential and continue to buy market dips instead of selling rallies until summer weather is better known. I expect corn to trade $3.60 to $3.90 for the next few months. Excess old crop will keep prices from going too high and reduced 2017 acres will keep prices from going too low.
March options expired last Friday with futures closing at $3.63.… Continue reading