(This is an excerpt from an article I originally published on Seeking Alpha on November 26, 2017. Click here to read the entire piece.)
November dashed my expectation for a range-bound Teucrium Corn ETF (CORN).
The November World Agricultural Supply and Demand Estimates (WASDE) threw a curve ball of sorts by further underlining surplus conditions for corn. From the report:
{snip}
The USDA provided $2.80 to $3.60 as the expected full range of the price of corn. {snip}
Source: Macrotrends
{snip}
Source: FreeStockCharts.com
CORN is down 9.5% for the year. The chart for CORN was looking hopeful going into WASDE. The August 31st surge seemed to presage a seasonal recovery and even the subsequent consolidation looked like a coil waiting to spring to the upside. Instead, CORN is now left scrambling for a catalyst to get upward momentum for at least the rest of the year. Seasonality may yet provide that catalyst.
According to an analysis of seasonality published by Teucrium, corn on average hits a double bottom between August and October. {snip}
In a recent Bloomberg Markets P&L podcast, Sal Gilbertie, president and founder of Teucrium Trading LLC, and Mike McGlone, a commodity strategist at Bloomberg Intelligence, discussed the near-term prospects for corn. Corn prices are now at or below the “perceived” cost of production. {snip}
When a commodity drops below the cost of production, I smell a bargain. So I am going to continue waiting on CORN here. {snip}
Be careful out there!
Full disclosure: long CORN
(This is an excerpt from an article I originally published on Seeking Alpha on November 26, 2017. Click here to read the entire piece.)