December was a useful month in terms of snowfall across the Midwest – 68.4% covered by snow with an average depth of 3.2 inches (National Weather Service). There was no snow cover in November (not a particularly constructive month in terms of remedying drought conditions) and very little in December 2011 as well (2.3% covered by snow), so snow season is better begun than it was last year.
While constructive, the December snowfall only represents the equivalent of about ½ inch of rain – snowfall in January and February will have to be measured in feet in order to provide substantial relief to the drought conditions that still linger across much of the United States.
We remain bearish on corn fundamentally, and the commodity remains bearish trade and trend on our model. However, the persistent drought conditions bear watching as we progress through the winter.
HEDGEYE RISK MANAGEMENT, LLC