Last week I advised traders “Today’s break above $5.83 ¼ is a minor break out to the upside after 2 days of market consolidation. Traders should watch for another push to break above the major trendline (see red line on chart below) if that happens, I believe it will, the market should push quickly to the $6.00 area. I remain bullish…” In fact, after the break above $5.83 ¼ on December 3rd March corn had an inside day and then has moved higher for the last 3 trading sessions with each session seeing a higher high and a higher low. At the time of this writing, March corn is trading at $5.91, a solid move higher since last Friday. At 11am today the USDA will release the Supply/Demand and Crop Production Report, this could be a market mover. I would recommend traders watch for a breakout above $6.01 ¼ or break below $5.55 ¾ (see red lines below) to gauge short term market direction.
The “big picture” numbers remain the same and probably will for some time. I firmly believe a break below $4.96 could give the bears control of the market and a break above $6.39 ½ on the upside may have enough bulls behind it to propel corn to all-time highs. There are several minor areas of support and resistance inside this range that can help with short term market direction if violated. Call me directly at 1-800-367-7290 for more in-depth discussion on these numbers and to discuss trading strategies specific to your situation.
I would suggest using an option strategy to manage your futures position risk or an outright option strategy. Implied option volatility has come down quite a bit from its most recent highs mainly due to the consolidation and tighter trading ranges. I have 25-years of grain market experience, feel free to call or email with any questions you may have. Be sure to check out my archived weekly grain market insight articles posted on our website
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