Overnight, March Corn was up ¼ cent at $4.17 ¾.  The included chart shows that the uptrend in corn continues to slug along.  The daily chart here shows the potential of an ascending triangle forming.  I have marked the possible triangle on the chart with two straight red lines.  You can see that I have drawn a line rising up below the  lows made over the past month, and another line drawn horizontally across the recent highs.  This is an ascending triangle.  These triangles normally break out through the flat side, meaning the top side in this case.  That goes along with our uptrend thesis.  The eventual price target remains $4.60 to $4.70.  We will watch over the next couple of weeks whether corn can break out over the top side resistance in the $4.25 area.

 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 80 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 12 ¾ cents at $4.04 ¾ this morning as I write on a weaker dollar.  The included chart shows that yesterday, March Corn fell sharply into the 40 day moving average and has now reversed off of that level.  The directional movement indicators are right on top of each other poised to turn bearish.  That may change if today’s rally can hold by the close.  The ADX line is still falling suggesting no real trend for the near term.  It is clear on the chart that very good support for prices has consistently come in around the 40 and 90 day moving averages over the past month.  As a matter of fact, over the past month, when prices tested those two averages, prices rebounded sharply off of those lows.  The problem for the bulls is that every time prices get a little above the $4.00 area, corn seems to hit a brick wall.  I read that it is the futures funds that are the buyers near the low prices and farmers who are the sellers near the highs.  Without more evidence as to the condition of the remaining corn crops, farmers are getting nervous and are choosing to sell some of their harvested crops.  To me the trend in corn still strong to the upside until the 40 and 90 day exponential moving averages are broken on a closing basis.  The longer that corn trades in this $3.70 to $4.25 range, the bigger the break out will be when it comes.  I recommend staying with our current option positions.

 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 86 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 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.

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The December Corn $4.30/$4.50 call spread expired worthless on Friday at the December option expiration.  We had three of those spreads that expired, and the resulting loss turned out to be $262.50 gross, total for all three spreads combined.

Today, I will begin covering the March contract.  March corn is up 6 ½ cents at $$4.13 ½ this morning as I write.  The weaker dollar is the main reason for the strength.  I am not hearing anything about the crop condition which is bothersome.  The enclosed chart shows that March corn is in a bull move with strong support down near the $3.80 area.  The strong resistance is in the $4.25 area.  Basis the March contract, my technical chart objective for March corn is in the $4.60 area.

 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 88 days left until March options expire.

 If March corn prices ever close below the $3.80 area, I would hope that the producers have already liquidated most if not all of their corn that needs to be sold.

Producers should have up to 75% of their crops hedged with put option strategies or 50% hedged and have sold a portion of their crop already.  If prices spike past $4.00, consider selling more of your crops along the way as prices trade higher hopefully towards my target of $4.50.  I wouldn’t hold out for $4.60 because prices may never get there.  Instead, steadily scale out of your corn holdings.

For those of you who need to look at hedging next year’s crop, you may want to consider locking in some prices for next year’s corn crop as December 2010 prices reach into the $4.50 to $4.90 area. 

 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.

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