It’s hard to believe we are in the middle of November already, but here we are. With that, it means we are approaching a seasonal trend trade for corn and soybeans. Today, we will focus on Soybeans because that’s where we feel there is a better setup. March soybean futures have trended higher for 14 of the last 15 years from November 16th to January 9th. The average profit has been roughly 65 cents, while the one loss (highlighted below, 2018) was 19 1/2 cents. Seasonal trends are not a guarantee and aren’t a straight line. So, risk management is still as important as ever. There are three ways we like to play this seasonal trend, which will be at the end of this writeup. |
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Above: You will see the 5, 15, and 30 year averages of March soybean price fluctuation during the time of the seasonal, with the green arrow marking the beginning and the red marking the end. |
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Above: You will see the year-by-year breakdown of March soybean prices during this seasonal trend. This includes average profit and loss, best and worst equity amount, and more. |
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Above: A chart of March soybean futures. We’ve seen the market spen majority of iot’s time consolidating since the summer highs and lows. Coincidently (or not), lingering right near the middle of that range. The market looks to be building energy for a bigger directional move once trendline support or resistance is broken. |
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Three Ways to PlayThere are more than three ways to play this seasonal trend, but these are three that we are keeping an eye on. Markets are not a one size fits all, so feel free to reach out to our trade desk to discuss a strategy that may be suitable for you.
1. Buy a future with a stop. Use a stop that fits your analysis and risk parameters. If you need help talking through that, contact our trade desk. 2. Buy a call option. With this strategy your market risk is limited to what you pay for the option. 3. Buy a call spread. This strategy may allow you to spend less than an outright call, while getting you closer to the money. The tradeoff? Your upside is limited.
Our trade desk is here to help! Call 312-278-0500 or email Oliver at Oliver@BlueLineFutures.com
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Futures trading involves a substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete, and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
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