Corn Hits New Multiyear Low

Back in January this year, Corn futures had reached as low as 408 (see Weekly Corn futures chart below).   Today, September Corn futures hit as low as 397.50, making it a new low (the last time prices dipped below 400 was in 2010).

We are going to be watching for a 123 bottom formation before going long the Corn market.  Stay tuned!

Weekly Corn

Moving Our Stop-Loss in March Corn Futures

We have been long March Corn futures since 445 (see:  Corn Futures Prices Spiked Today), and today, March 5th, 2014, prices shot up to 481 and are current hovering around 478 at the time of this post.   Our original Stop-Loss was at 437.25, but we contacted our broker today and had him move our Stop-Loss to 446, just below the support level shown in the Daily March Corn chart below.   Since we are long from 445, if we get stopped out we will have risked nothing on this trade (and may even make a few bucks).

Daily Corn - March 2014 - 3-5-14

Corn Futures Prices Spiked Today

We have been long March Corn from 445 with our stop-loss set at 437.25.  Today, prices spiked up to 470.50 before closing at 464.00.

Looking at the Weekly Corn chart below, our target is the 50% Retracement level of 562.75.  We could move our stop-up to the support level of 446.50 to lock in some profits, but since that is just barely above where we entered the market (at 445) that we are going to wait until prices move up some more.

Weekly Corn chart

Exercising Our March Corn Option

We had purchased a March Corn Call option at a 445 Strike Price (see our post: We are Long Corn After Breakout Above 439 As Of 12/12/13) which expires today, 2/21/14.  Prices as of today are 453.5 (at the time of this post).  Since our March Corn Call option is worth a little less than we paid (we paid $437.50 back on 12/12/13, and as of now it’s worth ~$425.00 if we sold it, since there is no more time value left on this option) we are instead going to exercise our March Corn Call option and place our Stop-Loss at 437.25 (just below the support level on the Daily Corn chart below).

If prices move up from the current level of ~453, we will gradually move up our Stop-Loss to lock in more profits.  If prices move down below 437.50, we will have only lost our original investment in this option of $437.50 plus $400 (445 Strike Price minus 437.25 = 7.75 cents X $50/cent) if we get stopped out.  That’s a total risk of $837.50 in a market already trending up with huge upside potential.

Daily Corn - 2-21-2014 Support Level

We are Long Corn After Breakout Above 439 As Of 12/12/13

On 12/11/13, Corn closed above the #2 point on the Daily March 2014 Corn Chart (see below).   The closing price on 12/11 was 439.25.   As of 12/12, Corn opened at 430 and we bought 1 March 2014 Call Option at a strike price of 445, which is 3 strike prices out of the money, for 8.75 (cost of $437.50 – 8.75 x $50/cent).  This option expires on 2/21/14.

Prices moved as high as 439.75 before dropping back down.  Over the next few days/weeks we will watch this Daily Corn Chart to see if prices continue to trend higher.  Our target is the 50% retracement level of 468.

DailyCorn - March 2014

Time to Go Long on Corn?

As you can see from on the charts below, Corn (CBOT) has made a multiyear low and is forming a 1-2-3 bottom formation, with a #1 point at 418.5 and a #2 point at 439.0 (the chart below is incorrectly labeled 436.75 for the #2 point – oops) with a possible #3 point at 430.25 on 12/6.

If the price of Corn on this March 2014 chart goes above the #2 point formed on 12/5, we will go long corn as it breaks above 439, with a target of the 50% retracement level at 468 based on the last high of 517.50 on 8/26/13 per the Daily Corn chart below.

Of course, the Corn market has the potential to retrace all the way to 564 based on the move from the high shown on the Weekly Corn chart of 717.50 during the week of 7/12/13.  So there is huge upside potential with this trade.

1-2-3 Bottom Formation in Corn - almost ready to trade

1-2-3 Bottom Formation in Corn – almost ready to trade

Multiyear low in Corn

Monthly Corn Chart – Multiyear low in Corn

Multiyear low in Corn
Weekly Corn Chart – Multiyear low in Corn