In last week’s update I advised there could be a buying opportunity in corn down near the trend (see chart below). The technical picture held up nicely until we saw the much-awaited Crop Report on Wednesday. The strong technical setup coupled with an unexpected decrease in corn acres forced the shorts to cover and new buyers appeared to come into the market in droves. Corn locked limit up 40 cents and Nov 21 Soybeans closed 86 cents higher. This week, Sept corn went from a low of $5.28 to a high of $6.26 basically a $1 move. Looking at the chart pattern, the market appears to be in a consolidation pattern “coiling up” and getting ready for its next move. If the weather continues to stay dry and HOT all I can say is look out, this is not a market I would want to be short. With a weaker US dollar, tight stocks, lower planted acres, strong demand (look at year over year Chinese corn imports, up over 425%, unconfirmed sources suggest China’s corn production is way off), drought like conditions in most parts of the Midwest, freeze/frost problems in parts of South America – I see the perfect “ingredient’s” for corn and soybeans to continue higher. 

With these market conditions, you may want to look at an options strategy as a possibility. I have 25 years of market experience, please feel free to call me at 1-800-367-7290 for more details or to discuss in depth 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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