Oct. 29—A wild ride in corn perseveres as outside markets offered reasons for the rally despite bearish fundamentals. Energy prices and metals soared and the U.S. dollar weakened, offering new opportunities for outside monies to invest in the rapidly growing yet volatile commodity complex.



Corn has seen its share of volatility with highs and lows attaining wide ranges. In an October USDA report, U.S. ending inventory increased from a previous estimate of 1.675 billion to 1.997 billion bushels. One thing to keep in mind is yield was reduced from 155.8 to 154.7 bushels per acre. The U.S. yield figure has only been above 149.1 bushels per acre once with 160.4 in 2004. Therefore, the 2008 yield could be the second-highest yield on record. Despite total corn production projected lower, total demand was reduced as well. Proposed corn demand from the feed and ethanol sectors declined by 150 million and 100 million bushels, respectively. However, corn exports are projected 100 million bushels higher due to low world carry-out of corn and coarse grains. World corn rests at 8.8 percent carry-out to use versus the current U.S. carry-out to use ratio of 15.8 percent. However, world coarse grains leave this market vulnerable as we go forward. It will be crucial to build world grain inventories to keep the continual growth of the international marketplace appetite satisfied. Eyes will be on South America this fall to see how soybeans and corn progress. Corn will stay supported as energies stay supported. However, any strength in the dollar could lead to a slide in corn.