RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

In today’s Grain Market Insight, I am going to focus solely on the corn market. If you would like to discuss any of the other grain markets or receive detailed insight on them, feel free to reach out to me by email or phone. The hot and dry mid-west weather has continued to be of concern and should be to an extent. While we have seen the good to excellent crop rating slip over the last several weeks, we have also seen some rain in several areas just in time to help alleviate additional stress. Now that we are moving through the crucial pollination stage with just enough rainfall in some areas and not overly hot temperatures, we need to look at how much weather premium could come out of the market and I see signs that the market may be ready to just that. Historically, looking back at the market even in big up years like 96, 08, 11 and 12, the market has a strong tendency to seasonally move lower around this time. When we look at the corn monthly chart, we can see market consolidation over the last 3 months. Although the monthly trading ranges for May, June and July have been quite large the market really hasn’t gone anywhere. There are several minor support and resistance levels inside the range but I see the major breakout areas above $6.58 and below $4.97 (see shaded area on the weekly chart below).

I would suggest using an option strategy to manage your futures position risk or an outright option strategy. Implied option volatility 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.

Corn Sep ’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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