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Corn Drops from 30-Month High on Weaker Demand Speculation

January 19, 2011 at 20:51 by Andriy Moraru

Corn dropped from its 30-month maximum and snapped its yesterday’s gain as the market participants speculated that there won’t be enough demand at the current price levels.

While corn managed to grow by about 65 percent during the last six month, the dynamics of the amount of the long positions in the futures market suggests that the traders and investment funds aren’t so sure in the positive future of this commodity. In two last weeks they’ve cut the net long positions by more than 5 percent.

Corn has managed to set a new highest level since July 2008 today but then it fell rapidly in a correction. During the day the commodity reached a minimum level since last Friday. Experts say that the big investment funds see little room for more long positions in the market and prefer to take their profits whenever a strong rally is spotted.

Corn fell from $647.25 to $644.50 per 100 bushels or 0.4 percent as of 18:47 GMT on ICE today. The intraday high was at $666.00 and the intraday low — at $641.00.

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