Market traded in a tight range today as the N/Z spread came in further today to trade as low as 440 pts. Now that July options have expired, the open interest is right at 26,000 contracts and looks like it should liquidate in an orderly fashion through Friday before FND on Monday the 25th.
After hitting an 11-week high on Friday, there seemed to be some profit taking today as the market is looking for new fuel to try and test the march high of 55.60. Specs should come in over 20% long tomorrow which is starting to really reach an overbought level that may be setting us up for a short term correction.
Volume was estimated at 48,000 futures and 18,000 in options as the total open interest came down from last week to just over 210,000 contracts.
Weather issues are still hanging around for new crop as the Delta and Southeast are in desperate need of rain but getting some relief this week. This is having a much more negative effect on the new corn acres that were planted in the South and acting as a reminder for many producers about the risks of planting corn in the South.
This weather stress is also giving strength to Soybeans that are now setting new records on a daily basis. This is helping to support all the commodities at the moment as cotton is trading near contract highs as well.
We may see the specs make another run at the highs, but the market is starting to look like it is ready for a pull back where there will surely be more buyers on the dip. Z'07 looks like it may be setting up to trade in a range with the low where N'07 is going off the board of a 55/60 cent price range.