Is it time to go long corn?
Oct 13, 2008
We have been getting calls from a lot of feed buyers and producers on when to buy the corn market. We have suggested waiting until a technical signal develops. I would prefer to see a sideways trading ban lasting say two or more weeks. Once a solid overhead resistance line has developed, one would start buying after the double bottom on say an 8 to 13-day moving average line. Right now, I feel it will occur when corn harvest is say 60% to 70% completed.
More than likely a break out signal can not really develop until after the November USDA Supply & Demand report and more than likely right before Thanksgiving. As we all know, a lot will depend on what happens to the Dow over the next couple of weeks. Please note: When you decide to buy, I would really encourage buying deep in the money lead month futures if you are bottom picking.
The December 2008 11-day is at $4.59 and 18-day is at $4.95. This is just above the gap made last week. We would suggest buying 1/3 of your desired bushels at these respective chart points. Please be aware these levels change daily. Our bias would be to buy in the money calls or long futures with tight stops. Either way effective money management now is the key to hanging on until the market turns.
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