March Corn is down 10 cents at $3.93 ¼ this morning as I write.  Corn has tested just above the $4.00 area several times over the past couple of weeks and failed to follow through each time.  The included chart shows the battle ground being formed between important support in the $3.75 to $3.85 area on the lower end and $4.20 to $4.25 on the upper end.  Harvest is progressing at the slowest pace on record and we are still not hearing much on the quality of the crops being harvested, at least not officially.  Rumors of poor quality corn can only hold a market up for so long before traders want to see the proof.  With today’s selloff, the directional movement indicators are poised to turn bearish.  Let’s see how the market closes today.

 Followers of this letter should be short 1 March Corn ($3.20 strike) put option from 6 ½ cents, and long one March Corn ($4.30 strike) call option from 17 ¼ cents and short 2 March Corn ($4.90 strike) call options at 7 3/8 cents each.  There are 87 days left until March options expire.

 With all the price tests above $4.00 recently,  I would hope that the producers have already liquidated most if not all of their corn that needs to be sold.

 David Hall

 The information  and opinions contained herein comes from sources believed to be reliable, but are not guaranteed as to accuracy or completeness. The risk of loss in trading futures and/or options can be substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not  necessarily indicative of future results.