Corn and Beans Higher Again Wednesday

Corn had an active day of trading Wednesday and closed with gains of 5-10 cents. May corn closed well over the 200-day moving average and it looks like the funds continued to cover their short positions. There are fundamental  reasons for corn moving higher, like good domestic demand and dry weather in Brazil, but money flow is a major factor too. The USDA announced a sale of 136,000 MT of corn to an unknown destination for 2016 delivery. There were thoughts it might be China that bought the corn. According to the USDA, China holds the largest amount of corn in the world. However some traders are questioning the quality and quantity of corn China has.

Beans saw another great day Wednesday, posting gains of 12-24 cents. May had a solid close over $10 a bushel. Like corn, beans have a fundamental reason for moving higher, like wet weather in Argentina delaying harvest. But, money flow is helping beans too. There are reports that Argentina has lost 5-10 MMT of beans because it is too wet to harvest them. There was a lot of bull spreading Wednesday. That means the nearby contracts gained a lot more than new crop November. I suspect one reason may be a lot of farmers selling new crop November beans. After all it has been a huge rally.