Commodity ETF Alert October 2014 Issue

 

Commodity Outlook:  CORN

What an ugly summer for the price of corn…

Starting in May, investors suddenly became bearish on the essential grain.  And as time went on, sentiment towards the commodity grew even worse.

Why?

In a nutshell, Mother Nature provided a nearly perfect planting and growing season for US farmers.

In fact, the United States Department of Agriculture (USDA) is expecting 83.8 million acres of corn to be harvested this year.  While harvested acreage will be lower this year than last, the yield per harvested acre is expected to surge to 171.1 bushels per acre.

To put that in perspective, farmers pulled 158.8 bushels per acre off US fields in 2014 and 123.4 bushels per acre in 2012.

Thanks to this incredible growth in yields, the US will be awash with corn.

As a matter of fact, the USDA expects US farmers to produce 14.4 billion bushels of corn this harvest season- an all-time high!

But here’s the deal…

Investors have been pricing in these huge supply expectations for months.  The summer price downturn has corn trading at 4-year lows near $3.25 a bushel.

No doubt about it, from a long-term perspective, corn is very cheap right now.

And that’s precisely why we’re going to start nibbling at the long side of this market!

While I don’t expect a stunning bull market to erupt any time soon, corn simply can’t stay this low forever.

You see, not only will many farmers likely switch to soybeans in the 2015 planting season, but they’ll likely plant less corn acreage too.  There’s just no sense in planting the commodity in every nook and cranny of the US just to produce it at a loss.

Thanks to these looming supply/demand shifts, corn will eventually rise from these exceptionally low prices!

Now listen closely…

This will be a patience trade.  Like I said a minute ago, a phenomenal corn rally is unlikely any time soon.

However, the commodity is unsustainably cheap right now.

That’s why you should go ahead and buy the Teucrium Commodity Trust Corn Fund (CORN) at any price under $24.30!

Let’s look at a chart…

Technically Speaking:

As you can see, it has been a wildly bearish summer for CORN.  But notice how the commodity ETF is starting to turn higher on the far right side of the chart.  While it may not be the absolute bottom for this commodity, it’s likely very close!

WHAT TO DO NOW:

Teucrium Commodity Trust Corn Fund (CORN) is trading at $23.70
Buy CORN up to $24.30 per share
Our profit target is $30.00 or more

 

Category: Commodity Trading