Over the last two weeks December corn has been consolidating just under what I believe to be a major trendline (see red trendline on chart below). Yesterday December corn hit a daily high of $5.81 and closed at $5.80 ½, which is the highest daily close that contract has seen since July 1st, 2021.   Two weeks ago, 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.”  Then on November 19th I advised traders “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.”  The last three sessions, including today, we have seen higher highs and higher lows with December corn hitting a daily high so far today of $5.89. The market appears poised to continue higher, but not without some selling pressure from time to time. For now I remain bullish especially with a break above the trendline I mentioned earlier. A close above $5.84 today would bode well for the bulls in my opinion to keep prices moving into Friday. Keep in mind this Friday is December grain option expiration so we could see increased volatility on both sides.

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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Corn Dec ’21 Daily Chart
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Michael Sabo

Senior Market Strategist
Michael was past president and co-founder of United Futures Trading Company, Inc., as well as Investment Analysis Group, Inc. In 2006, Michael joined Lind-Waldock as a senior market strategist. He joined RJO Futures in 2011.
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