For the last 2 months it has been like watching paint dry with sideways action in corn as the 50 day MA has capped every upside attempt. However that changed yesterday in March future as prices closed above their 50 day MA and then today we have probed the down sloping trend line that has held since August.
My suggestion has been to gain bullish exposure as I am targeting a trade north in the coming weeks. I’ve advised clients to use the Fibonacci levels in the chart above as their targets. My favored play is back ratio spreads. Just like I have advised traders to scale in I would also advise them to scale out on the way up.
Cash markets are firm across the board in Ags, which is supporting calendar spreads and helping outright futures move higher today as I think this could be a reversal in the making. Farmers are not interested in selling and the only way for that to change is for the market to trade higher. Another rationale to why I opted for corn instead of soybeans even though the soybean chart is attractive is corn does not have the weight of a hefty S. American crop coming on.
By. Matthew Bradbard
To discuss in more detail this chart or any other you can reach me at:
firstname.lastname@example.org or 954-929-9997
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