The corn exchange traded fund jumped higher Tuesday as traders reportedly covered short positions ahead of the U.S. Department of Agriculture’s report on Wednesday.
The Teucrium Corn Fund (CORN) was up nearly 6% in afternoon trading Tuesday. The ETF tracks corn futures.
The USDA will issue its report on acres, yields and surpluses early Wednesday morning, reports Dan Piller for the Des Moines Register.
Commodity trader Don Roose of U.S. Commodities in West Des Moines believes that corn has been “deeply oversold” after dropping over the summer. “The market is awfully nervous before that report tomorrow. We’ve been surprised before,” Roose added.
Broker Tomm Pfitzenmaier believes that the drier conditions could help drive up prices.
“We are just beginning to hear some talk about if the dry conditions that are being seen in most of the Corn Belt,” Pfitzenmaier said. “Soil moisture conditions going into next year are a cause for concern. Traders are looking at the dry conditions in the southern plains this summer and beginning to worry that those dry patterns could be moving into the Midwest. No matter what the report says tomorrow, we are still going to be heading into next season with a lower carryout than we had this spring and it is going to be important that we grow another big crop.”
Teucrium Corn Fund
Click to enlarge