Corncontinues to benefit from increased interest in "money flow." Many larger funds and and bigger investors continue to look for ways to gain exposure to thecrisis in the Black Sea region. Corn currently seems to look like one of the least riskiest ventures, with downside risk perhaps more limited than itsavailablecounterparts.
With strong U.S. corn demand and politicaluncertainties in both Argentina and Ukraine, the trade is increasingly more concerned about U.S. weather. The funds and large traders seem to feel that corn can give themadditionalgeopolitical exposure while the downside could be somewhat limited until more defined U.S. weatherpatterns are identified. In other words, if the Ukraine/Russian conflict intensifies and starts to spook the US equity market, the corn market will also get spooked and in turn the price of corn will move higher and help offset some of the losses in US stocks. The hedge seems somewhat smart nearby considering theuncertainties of US weather and possible planting delays.
Ukraine & Russian producers becoming nervous
There is starting to be more fear, even though exports are still running smoothly, that both Ukraine and Russian producers are becoming more nervous. The talk is that farmers in both countries are much more worried about what happens in the days and weeks ahead. Many are considering the fact when the U.S. wages "economic warfare," as itoften does, it can create very difficult times for those left in it's wake, i.e. an increasingly devalued currency andcrippling inflation.
Remember the "rules ofengagement" for the U.S. right now prohibit what the military calls "kinetic" methods...things that shoot and explode. No Special Forces, no armored tanks, no long-rangemissiles. Instead only weapons of complete financial destruction! Producers are obviously worried that if the U.S. is actuallysuccessful intheir scheme of "financialwarfare," then ripping inflation and a devaluing currency will leave them no choice but to holdontotheir production as some type of economic hedge.