Near-term trading bands for corn and beans?
Oct 14, 2008
The bean market has been all over the place today. The market started out extremely strong on project (A) then started to fade and actually closed lower. I have to say I’m a little disappointed with the beans inability to hold the gains. Basis has started to narrow which should be positive to the flat price. A rain event is coming in which also should help support beans. I suggested clients buy the breaks in beans today. We day traded profitability for one trade and went home long on the lows looking for a bounce into tomorrow. I hate to say it but the beans look range bound. I would be a buyer of support and seller of overhead resistance. My bias is a trading band rather than a trending market will be the pattern for the near term.
As for corn, it started out strong, gained some mid-session strength but came under pressure on the close as the bean market lost ground. Corn is showing the same pattern as beans, it really does not seem like it wants to go lower and good buying develops at the recent lows but neither does it want to rally. I would not be surprised to see a sideways trading band develop over the next weeks with no significant upside price momentum develops until: 1. The stock market shows signs it can hold it gains. 2. The corn harvest is close to 75% done and the bin doors start to shut.
In general I like buying December corn between $4.09 and $4.01 but with defensive stops below $3.92. My upside objective is $4.45 to $4.65.
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