Corn Approaching A Major Low?

I forgot to post the outcome of my trade.

I closed it friday purchaseing Dec 250 Call @ 2-0.

I should have waited a little longer...
 
Corn still searching for a price low enough to stimulate demand.

With recent support now resistance, (225 DEC/233 MAR) the trend is stil down, but note the BULLISH RSI DIVERGENCE and broadening formation - probably a reversal pattern in the long run.

March calls are very cheap now, with IV @ circa 20%.

Obviously something different is needed to turn this market around.

Demand? Frost? Post-harvest seasonal?
 

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Under a purely technical point of view, I can;t agree with your statement: IMHO, what we see in the chart is the typical pattern when retacements occur.

If you draw a trendline based on relative lows of both future and indicator, during july and august, you see the retracement forming.

For the future you could rather see a support area.

Once the prevailing downtrend resumes both trendlines are broken.

The support trendline you draw is, IMHO, not correct, as there is no relative low to starrt from.
 

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Moneycat - agreed. I stand corrected.

However ,if we saw a bounce from here, in both price and indicator, my trendlines would then become valid.
 
Anybody stil in here?
I am now at level 3 of a scale buy and rather hoping we will find a nice bounce.
Same thing for Soymeal
 
twalker said:
Anybody stil in here?
I am now at level 3 of a scale buy and rather hoping we will find a nice bounce.
Same thing for Soymeal

Well I tried (and failed) to get a short fill on the close last night and have been shorting wheat and corn intermittently over the last week or so. I think my time horizon is much shorter than most of you here, I'm in for 1-5 days a trade, so in the big picture of things we can both be right.....
 
twalker said:
Anybody stil in here?
I am now at level 3 of a scale buy and rather hoping we will find a nice bounce.
Same thing for Soymeal

I cut short SM F5 yesterday so perhaps the bounce in these will indicate a bounce in the grains...... will be watching.
 
Seasonals point to a bounce/rally from late September to mid-October.

From my March Corn seasonal chart (below), I see that the seasonal pattern has been followed pretty closely this year.

Yes, I am considering further scale buying of deferred calls here. Patience is required with this market though. HARVEST PRESSURE AND THE BIG-CROP MENTALITY,etc.

If we have printed a short-term low yesterday, we have lenghty bullish divergence on the March charts, (see attatched) which should eventually lead to a rally. Sentiment is very low, which usually accompanies major lows in price.


Fundamentally, demand is picking up , and could further accrue once harvest is past 50% complete. There's the old frost possibility again (weekend?), but the more time passes , the less impact this will have on the crop.

The OCTOBER S/D REPORT (around 12th?) forecasts are coming in at 11.2-11.5 bn bushels (production), a further increase.. However, last month's forecasts were for a drop, and they (USDA) ended up raising the production estimate (???)

A good value scale buy for the patient position trader who practises good risk management., IMO.
 

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BTW, (a bit off-topic),

With reference to earlier posts, I've found a US broker's site that has OPTION PRICE CHARTS for most of the major markets.

There is a free 30-day trial available, prior to sign-up, for anyone interested. :

www.ccstrade.com
 
minx said:
I cut short SM F5 yesterday so perhaps the bounce in these will indicate a bounce in the grains...... will be watching.

Yesterday was the 1st up day after a 11 day decline!! I was stopped out of short at 210 from 231 (indeed a silly place to put the stop!). Would not be surprised to see C down below 200 even after a short term bounce to 220-230'sh. Downside momentum appears just too strong.

Still holding short W Z from 233 but no intention to let it retrace a lot. I want to see a swift decline otherwise will go flat.

Otherwise, waiting for the seasonal October lows in the Soybean complex. S X and SM Z appear to be tracing out 5th waves. Are these the bottoms? I'll wait for confirmation, I 've been catching tops and bottoms a little too often recently. Is BO Z making a double bottom? Possibly, Meal - Bean Oil spread seems to be setting up for another leg down.

Anybody, doing spreads? I have tip toed in the KW Z4 - KW K4 currently trading at -8cts, stop at -18cts, target at +20-30cts by Mid-November. Any thoughts? Perhaps, we should start a commodity spread Thread.
 
Corn appears to be following through from yesterday's bullish OUTSIDE DAY UP BAR.

Notice how the RECTANGLE continuation pattern hit it's breakout target (downside) @ 216 MARCH

1st resistance (march futures) is the previous support @ 233.
 

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Anyone still watching this chart? Could the recent day of high volatility that took the price well below 200 be the last exhaustive attempt of the bears to take this market lower? There are also divergences on the MACD which would suggest the bear are running out of steam. I'm now long and hoping this market starts hitting some bear stops thereby accelerating the move up. . . . .
 
For me it is a little too early to go long; but it is just my point of view

That is to say that I would not be comfortable being long here, seen the strenght and the lenght of this downtrend. Maybe after some clearer sign of reversal.
 
I really like corn at these levels .. the crops report out on Tuesday was very good so market tries to sell off but cannot maintain it below 200 so I think we could seee a try of 225/30 area

Peter
 
Moneycat - yr point well noted -you may well be proved right. I've bought March contracts to give the trade some breathing space. I agree there is crushing downside momentum but feel that any move up might bring out the bulls who will fill their boots at these prices. I want to be in at the start . . . . . logic that has trapped countless numbers in the past I know . . . what I can say is that I won't be shaken out lightly ( I hope their listening) and am in for the longer term move.
 
fastnet said:
Moneycat - yr point well noted -you may well be proved right. I've bought March contracts to give the trade some breathing space. I agree there is crushing downside momentum but feel that any move up might bring out the bulls who will fill their boots at these prices. I want to be in at the start . . . . . logic that has trapped countless numbers in the past I know . . . what I can say is that I won't be shaken out lightly ( I hope their listening) and am in for the longer term move.


Then, why not buying out of the money calls? That would give you more staying power.
 
Moneycat said:
Then, why not buying out of the money calls? That would give you more staying power.

March 240 Calls settled at 3 1/4.

Should make a decent risk reward ratio for a bull, isn't it?
 
Shame this thread wasn't continued. Since last posting Corn moved from $2.40 to $4.10. Some people foresee cormn prices later this year of $7.00 Suspect they are farmers ;-)

Long a little CN7 at 382, tgt: ?, stop 414 and a bit more CN7/CZ7 at 22.0, tgt 50+, stop 25 (posting a bit late, sorry)
 
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