RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

On January 14th I advised traders on the following: “As you can see the medium-term downside breakout level held at $5.83 ½ with lows coming in at $5.85 ¼ before seeing moves this week to a high of $6.17 ¼ which was reached today after seeing a small inside day yesterday. With the break higher today the market has triggered a short term buy (for aggressive traders) in my playbook. As I said last week, I still remain bullish and traders should watch the medium term breakout levels for market direction.” As one can see by looking at the chart below on Jan 24th March corn broke out above $6.18 ½, a level I mentioned several times in my articles. By January 31st March corn reached a contract high of $6.42 ½ which took out another key level, in my opinion, of $6.39 ½ a level I have been advising on for months. With the small pullback to current trading / consolidation levels (inside day forming so far today). If today forms an inside day I would advise traders buying on a breakout above todays high. I remain bullish for now but traders should be prepared for additional volatility at these prices especially with the recent breakout.

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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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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