Over the last week, corn, KC wheat, and soybeans have continued to consolidate. September corn did manage to make a higher high and a higher low on the weekly chart. At the time of writing, Sept corn is trading within a .01 of last week’s closing price and the majority of trading action this week has occurred between the 9- and 20-week moving averages. I would suggest traders prepare to play a breakout. The fundamentals haven’t changed much, the hot and dry mid-west weather has continued to be front and center. The weekly range for September corn, .30 ¼ cents, is the smallest range we have seen in the last 4-months. Historically, we usually see corn pull back around this time of year but so far that hasn’t been the case. Watch for Monday’s Crop Condition Report to see if the Good/Excellent rating for corn slips again which I think is very possible. This should help set the tone as the market looks for a fundamental catalyst.
I would suggest using an option strategy to manage your futures position risk or an outright option strategy. Implied option volatility is still relatively high compared to historical vol levels. You may want to incorporate some short options into your strategy in a calculated risk manner such as bull or bear option spreads. I have 25 years of grain market experience, please feel free to call me at 1-800-367-7290 for more details or to discuss in depth trading strategies. Also be sure to check out my past weekly grain market updates posted on our website.