Corn sits here approximately 12 cents off the yearly lows for new crop corn awaiting further direction. While there were some rumors swirling yesterday and today regarding an unwind of future tariffs with China that would most likely provide an AG relief rally, both corn and beans couldn’t muster any continuation to the upside. Those not hedged corn should consider the following trade. Buy the 360 March 19 puts for 14 cents. For every put bought a producer may sell 2 430 calls for 7 cents apiece collecting 14 cents. Cost to entry is zero minus commissions and fees of course. While a decline in condition in Mondays report was friendly for price, the net result has been only 6 cents higher in two days of trading. Major state producers still show impressive conditions with cooler temps and rain potential into month end. Not exactly a bullish forecast in my opinion. I will make no predictions on weather here and focus on the charts. In my view if December corn takes out 355 this week or next, new lows are coming. Last weeks report day high was at 363. Lets start there for an upside target.Major resistance sits up at 377 a key trend line in my view. Key moving averages sit above 390, a long way up. Condition reports need to show a decline in good to excellent ratings here to move us significantly higher in my view outside of a lack of moisture. The next key USDA report is the August supply/demand report on 8/10. Until then I would key on these levels. One does not have to married to these hedge positions, but I’m getting a little suspect here that some longs are getting sucked in here with the result being trend and index following funds re-shorting the market heavily on any push higher.
Please join me each Thursday at 3 pm central for a free grain and livestock webinar. A recording link will be sent to your email.