Corn Finds Tech Support, Help from China
Apr 19, 2012
TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.
Corn finds tech support, help from China
Both old crop and new crop corn contracts were aimed at testing major support levels after yesterday's close. May corn had touched the $6.00 per bushel mark and closed just a few cent off it, December corn had touched $5.25 per bushel for the third day in a row. Thursday's trade brought a reversal off the recent lows fueled by rumors of China poking around to buy some old crop corn. The old crop balance sheet is tight enough that any major China purchases could cause the need for price rationing. The initial strength driven by the China news was enough to bring in bottom picking activities as well as short covering as the timing of good news could not have been better. Funds were noted buyers of approximately 12,000 contracts. This sort of fund buying is usually technical in nature.
With this reversal off the lows it is possible that we could have a double bottom formation in May corn at $6.00, as well as in December corn at $5.20. From a technical perspective this could be the base for which a multi-week rally could build from. However, from a fundamental perspective it would really seem that although old crop corn could see the need for price rationing and therefore higher prices, it is difficult to build a case for an extended new crop corn rally with massive acreage and a record fast start to planting.
See May Corn Daily chart:
See December Corn Daily chart:
This means that speculators should be looking for opportunities and producers need to make sure they lock up prices that makes sense for their bottom line. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.
In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.
Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.
Ted Seifried (312) 277-0113 or firstname.lastname@example.org
Please check out my Blog at: http://tedseifriedfutures.com/
Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?rid=Seifried
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