On 10th of January, we had the first NFP of 2014 and everyone was focusing on those numbers missing the real news of that Friday: the US Department of Agriculture cut its estimate for US corn production and separate data showed corn stocks at a level that was less than expected. In addition, the US farmers unexpectedly reduced winter-wheat and winter-corn seeded acreage. Three days later, I wrote a wide analysis, published on my blog, about these two assets suggesting, to go long the corn and wheat futures contracts.
Yesterday, everyone was anxious to read the FOMC minutes while on my MT4 platform sparked the alarm for Corn-mar14 breaking the resistance at 452.50. Back in January I suggested to buy this contract at 430.00$ with a very tight stop loss and a huge reward. For those of you who now are thinking at the swap to be paid for keeping this trade opened for more than 30 days, let me inform you that for 3 lots bought on 13.01.2014, I only have 28.95$ of swap to pay, out of thousands of dollars profit.
While most of the analysts are blaming the weather for any bad number coming from America in the last 2 months, I said it then, and I am repeating it now: the bad weather could bring way more damages to the agriculture than to the NFP, ADP, or CPI and if policy makers have tools to help new jobs creation they definitely can't fight with God for better weather for their crops.
Yesterday, on twitter, zerohedge (I am sure most of you know zerohedge) said: “the snow in California is bullish for Usd/Jpy” :))) If you do not understand what he wanted to say with this, email me.
In my opinion, the move that the corn did yesterday is only the beginning. I think is only a matter of time till corn will reach the 38.2% Fibonacci Level and not a matter of “IF” cause the bad weather is really bullish for corn and wheat.
Oh, I said nothing about the FOMC minutes in this article because nothing is changed: they will continue with the tapering; some members raised the possibility that it might be appropriate to raise the rates but these members were the usual FED’s hawks - so nothing special about their theory; the economy is doing just fine and if it is not – is because of the weather :)