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Market Pro: Why Corn Could Fall Further

Corn
Jim Davis | Boston Globe | Getty Images

It looks like corn could continue to fall.

If you've looked at a corn chart lately, you've seen a pretty dramatic move lower since the high it made in August.

Why's that?

Well, the main factor is seasonal. Indeed, after the huge drought-driven run-up we saw in the summer, it is only normal to see the prices come off in the winter.

So do I expect more pain for corn?

Yes and no.

On the bearish side, we expect that a Department of Agriculture tomorrow is expected to show a drop in exports. And the current trend channel is certainly pointing lower.

However, it has sold off a great deal, and I would need to see a bit of a relief rally before I consider it a good candidate for shorting.

I'd like to short corn a bit higher, at $7.10, and target a move down to $6.60.

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