The included chart shows that December Corn prices look strong and may possible move sharply higher over the next few months.  On the other hand, if summer weather cooperates, we could also end up with a very large crop thus pulling prices back down.  We are currently short 6 December Corn $4.20 puts from 8 cents, that are associated with other long puts at higher strike prices that we already own as well.  Today, I recommend attempting to buy back to liquidate all 6 of the short December Corn ($4.20 strike) put options at 1 cent per bushel.  Let’s leave this order in GTC because either more time needs to wear off or prices need to rally further to get this order filled.

This will lock in a profit for that trade and take that downside risk off the table just in case we do end up with a bumper crop this year and prices fall sharply.  By the way, we already have Republican candidates for President already saying that we don’t need subsidies for the production of ethanol anymore.  This could affect corn usage as well down the line.

Followers of this letter should be in the following December positions:

Long 3 December Corn ($4.50 strike) put options at 13 ½ cents per bushel each.

Short 6 December Corn ($4.20 strike) put options at 8 cents per bushel each.  (Attempting to liquidate all 6 of these short puts for 1 cent per bushel, GTC!)

(There are 185 days until December Corn options expire.)

Long 1 December Corn ($6.50 strike) call option from 58 3/8 cents per bushel.

Short 1 December Corn ($7.30 strike) call options from 36 3/8 cents per bushel.

Short 2 December Corn ($4.50 strike) put options from 13 cents per bushel each.

(There are 185 days until December Corn options expire.)

Long 1 December Corn ($8.00 strike) call option from 30 ¼ cents per bushel.

Short 2 December Corn ($8.90 strike) call options from 17 1/8 cents per bushel each.

(There are 185 days until December Corn options expire.)

Long 2 December Corn ($9.00 strike) call options at 17 ¼ cents per bushel each.

Short 4 December Corn ($10.00 strike) call options at 10 5/8 cents per bushel each.

(There are 185 days until December Corn options expire.)

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.

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Overnight, March Corn was up 2 ¾ cents at $4.16 ½ per bushel.  The include chart shows that March Corn is beginning to show more and more strength and resilience while trading near the upper end of the trading range.  The only thing remaining is for March corn to break out over the $4.25 area on good volume.  That would be breaking out over the upper end of the trading range and the price target measured by the height of the range would be about $4.75.  Coincidentally, the $4.75 area is near the June price highs last summer.  It is interesting on how markets eventually return back to important price areas in the past.  They are like magnets.  The directional movement indicators are holding a bullish posture, just barely, and the ADX line is meandering sideways.  We need that break out!

 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 50 days left until March corn options expire.

 Short one May Corn ($3.70 strike) put option from 9 cents or $450 gross credit.

Long one May Corn ($4.30 strike) call option from 29 ¼ cents and short one May Corn ($4.60 strike) call option from 18 ¾ cents for an overall cost of 10 ½ cents or $525 gross.

There are 113 days until May corn options expire.

 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.

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Overnight, March Corn was down 1 ¾ cents at $4.15 ¼.  The included chart shows that March Corn continues to trade within the $3.75 to $4.25 trading range.  The latest rally over the last few days has shown some promise that something new is occurring.  The evidence for something new occurring in corn prices comes because the rally high of a couple days ago took out the previous rally high from a week ago and the with the rally, the purple ADX line has begun to rise, which hasn’t occurred throughout this whole consolidation range.  Today, the directional movement indicators continue to be bullish and the ADX line continues to rise.  Yesterday, we added to our bullish posture by adding the following May corn positions.  Yesterday, we sold one May Corn $3.70 put option for 9 cents, or $450 gross credit.  We also bought one May Corn $4.30 call option for 29 ¼ cents and sold one March Corn $4.60 call option for 18 ¾ cents.  So the call spread cost 10 ½ cents.  Combined with the short put option and the total overall cost of this combination trade was 1 ½ cents or $75.  A few hundred dollars of margin collateral was also required because we are naked short one put option at the $3.70 level.

May corn option expiration is in 114 days.  So what are the possibilities for this trade?  Well, at expiration, if May corn finishes above $3.70 and below $4.30, then the loss will be $75 gross.  The maximum gain at expiration would be if prices close over $4.60, and then the profit would be 28 ½ cents or $1425 gross.  The risk is unlimited if prices begin to fall below $3.70 because of the short naked put.  Between here and expiration, if May corn prices begin falling below the recent trading range in the $3.75 to $3.80 area, then I would be wanting to liquidate the trade.  Also, if May corn prices rally sharply in the near term, I may just take early profits on the whole trade.  If May corn prices rally steadily over the next month, the short put will drop in value and we may have an opportunity to liquidate that part of the trade early.  So, there are a lot of possibilities with this trade as prices move and time goes on.

 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 51 days left until March corn options expire.

 Short one May Corn ($3.70 strike) put option from 9 cents or $450 gross credit.

Long one May Corn ($4.30 strike) call option from 29 ¼ cents and short one May Corn ($4.60 strike) call option from 18 ¾ cents for an overall cost of 10 ½ cents or $525 gross.

There are 114 days until May corn options expire.

 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.

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Overnight, March Corn was unchanged at $4.16 per bushel following an impressive rally within the trading range yesterday.  The included chart shows that rally.  What may be very important about yesterday’s rally is that fact that prices managed to close above the minor rally high from a week ago and the ADX line has now begun to turn upward while the directional movement indicators are bullish.  I believe that most of the farmer selling is behind us and the long positions that the futures funds hold are beginning to win the battle.  Today, I recommend a multi faceted trade in May Corn.  I recommend attempting to sell short one May Corn $3.70 strike put option for around 9 cents, and then attempting to buy one May Corn $4.30/$4.60 vertical call spread for about 10.5 cents.  The short put strike is located just under the recent trading range and the premium received would pay for most of the call spread that we want to purchase.  If everything works perfectly and rallies, the potential gain in this trade would be the difference between call strikes, $30 cents, plus the short put option premium of 9 cents, minus the cost of the call spread, 10.5 cents for an overall gain of 28.5 cents or $1425 gross.  That is of course if we hold the trade all the way to expiration.  The risk on this trade is 1.5 cents if prices stay above $3.70 and below $4.30 all the way to expiration.  If May corn prices trade below $3.70, the our risk would be unlimited.  I would be recommending to liquidate the trade if prices closed below $3.70, if not much sooner.  In the near term, if prices break out to the upside and reach past $4.60, I would probably look to take profits on the entire trade early, whatever that may be at the time.  I also recommend holding our other positions already in place for now.

 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 52 days left until March options expire.

 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.

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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.

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Overnight, March Corn was up ¾ cent at $4.05 ½ per bushel.  The included chart shows that the $3.75 to $4.25 trading range continues and all the trading inside that range is just noise.  As I have said before, we need to be patient and watch for either a break out of the range, or a tightening of the range into what I call a coil for the build up for a large move.  For now, we will just hold our current ratio call spread position and enjoy the holidays.  Most commodities close at noon today.

 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 57 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.

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Overnight, March Corn was up 1 ¼ cents at $4.00 even.  The included chart continues to show that March Corn is still stuck inside the $3.75 to $4.25 trading range and that all trading within is just noise.  What I would be looking for now would be for March Corn to trade in a progressively tighter and tighter range in what I call a coil.  If that happens, then we will be set up for a sharp move on the eventual breakout.  For now, hold the ratio call spread.

 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 58 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.

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Overnight, March Corn was down ¼ cent at $3.99 ¾ per bushel.  The included chart shows that corn continues to meander in the middle of the trading range between $3.75 and $4.25.  As long as prices trade inside of this range, the action to me is just noise.  It is when corn prices break out of that range that I want to watch for.  Continue to hold the current ratio call spread until then.

 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 59 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.

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March Corn is up 7 ¾ cents at $4.05 ½ per bushel this morning as I write.  The included chart shows that March Corn continues to trade inside a range between about $3.75 and $4.25.  So far, all the trading within that range is just noise as evidenced by the multiple bull and bear crosses in the directional movement indicators and steadily declining ADX line over the past month.  It is markets like these where a trader needs to be patient and let all the noise finish and wait for the market make a decision on which way it wants to go.  Having a ratio call spread in place right now is a great way to sit around and wait.  While the market churns sideways in a defined range, the ratio call spread doesn’t hurt us one bit, and actually improves the chances for success, because if a bullish break out occurs, a lot of time value has disappeared which is what we want for ratio spreads.  If corn breaks down, then fine, we took in a credit to do the spread up front, so if corn doesn’t come back, then we will eventually get to keep the credit.  My expectation is that eventually corn will break out to the upside.

 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 60 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.

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March Corn is 2 3/4 cents at $3.94 ¼ this morning as I write.  The included chart shows that March corn continues to trade inside of the $3.70 to $4.25 range that has been in place over the past two months.  Eventually, a break out of that range will bring on a sharp move in that particular direction.  Until then, we have to be patient and look for patterns within this trading range that may give us clues for what will happen next.  For now, it seems as if corn is reacting to a stronger dollar rather than its own fundamentals.  We will hold current positions for now.

 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 63 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.

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