In last week’s Grain Insight article, I advised traders on the following “Below is a weekly December corn chart, as one can see, this week December corn is trading inside last weeks price range. If it closes out the week this way (and I think it will) next week’s key short-term numbers to watch will be $5.38 ½ on the upside and $5.06 ½ on the downside. I would recommend traders take their cue from the breakout.” We got exactly that, a breakout on the weekly chart to the upside (see below) which suggests to me further upside. Yesterday’s Grain Stocks Report was inside expectations, leaning slightly bearish but not enough to damage the bullish chart pattern. For now, I think traders should remain cautiously bullish.
These numbers still remain the same for now – Watch December corn at $4.96 on the downside vs $4.99 and $6.39 ½ on the upside – basically a breakout on the May monthly chart. There are several minor areas of support and resistance inside that range that can help with short term market direction if violated as I mentioned above. Call me at 1-800-367-7290 for more in-depth discussion on these numbers.
I would suggest using an option strategy to manage your futures position risk or an outright option strategy. Implied option volatility recently came down but 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.