Last week on November 12, I advised traders on the following “Without extremely bearish news outside the expectations, it made sense the market has been moving higher. At the time of this writing corn is forming an inside day, If this continues and actually forms today, watch for a breakout next week. Upside number $5.80 and downside number $5.64 ½.” While we did not form an inside day on Nov 12 because the market finished that session with a high of $5.82, the two trading sessions after both formed inside days. Then on November 17th corn broke to the upside hitting a high of $5.84.
In todays market insight I wanted to give a quick look at the major rally we saw in 2010-2012 and compare it to the current rally that started in 2010. As they say a picture, or chart in this case, is worth a thousand words. See chart below.
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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