Overnight, March Corn was up 8 ¼ cents at $4.16 ¾.  That was an impressive rally.  Word is that most of the cargo ships that carry grain are currently booked until the end of the first week or two in January hauling soybeans to countries like China.  Since South America had weather problems with their soybean crop, many countries have come to the US to buy soybeans.  This was happening a few weeks ago, and now the ships are being used to transport the grain.  This explains why, even though export sales of corn have been high, shipments have been low.  That means that once the soybeans have been shipped, those ships will be coming back for the corn.  Corn may be beginning to rally in anticipation of that event.  All I know is that March corn is still trading within the $3.75 to $4.25 trading range and once prices close out of that range I will get excited.  I have to admit that this action overnight is very impressive and takes out the highs from a week ago giving a subtle hint that corn may be ready to break out to the upside.  Stay tuned.  For now, we will hang on to our current ratio call spreads.

 Followers of this letter should be 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.  (As a result of the profit made on the short $3.20 puts, our cost basis of this ratio spread is now a 1 cent credit!)

There are 53 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.

 This newsletter is not intended for dissemination to the public without prior approval from David Hall.