I had talked last week about the craze over Ethanol and how this hype was driving corn prices to levels that simply were and continue to be unjustified.
This past week, the corn market seems to be realizing this fact and has started and intermediate, if not secular bear market.
The Blue line on the bottom of the above chart represents the smart money and the closer to the bottom that line is the more bearish is the smart money. As you can see, the smart money line has turned up and is trending higher now but it has a long way to go before the all clear signal is given. I think that Corn is just starting to crack.
Typically when you start to hear all the fluff about how prices are going higher because of demand and the sky is the limit it tends to be a great place to either exit your long positions and begin to establish a short line.
Yes it is true that this country is going to go on a big Ethanol push and that will be good for Farmers and I applaud this move. However, the real money to be made from this push towards growing more corn will rest with suppliers of Nitrogen Fertilizers and Pesticides. I realize neither of those terms are very sexy, but it is worth looking into.
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