Short dated options and new crop weekly options can be a great tool to manage risk or take a position ahead of tomorrow's report. The shortened time frame can offer a more cost-effective way to manage risk. Feel free to reach out to our trade desk to discuss potential strategies. 312-278-0500
Corn
Technicals (May) Yesterday's continued failure against the 50-day moving (red line) average and break back below the 20-day moving average (blue line) has led to a decline in prices ahead of tomorrow's report, taking us back to the breakout point from 3-weeks ago. A failure to defend 431-435 on a closing basis puts the Bears back in the driver's seat with the next support pocket coming in about a dime lower, 421-422.
Bias: Neutral
Resistance: 441 3/4-444 1/2, 447 1/2-450*
Pivot: 431 1/2-435
Support: 421-422***
Fundamental Notes
The range of intended corn acres comes in from 90.0-93.472 million acres, with the average estimate being near 91.8 million acres.
Quarterly stocks estimates range from 8.129-8.568 billion bushels with the average estimate being 8.427. This would be 14% higher year over year and a 5-year high for this time of year.
Markets will be closed on Friday in observance of Good Friday.
Fund Positioning
Friday’s Commitment of Traders report showed that Funds were net buyers of roughly 13k futures/options contracts, the bulk of that being short covering. That trims their net short position to 242,988 contracts. Broken down that is 171,123 longs VS 414,111 shorts.
Seasonal Trends
(Past performance is not necessarily indicative of future results)
Below is a look at price averages for December corn, using the 5, 10, 15, 20, and 30 year averages. Though we believe we can see prices firm from these levels, we would urge Producers to temper the expectations, given the current balance sheet.
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Performance Disclaimer
Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.
One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.
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