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| Yesterday we had outside up days across the board. Then today it looked like it was going to be really ugly. With beans down double digits and corn down a nickel. But both managed to rally back and end the day green.
The wheat market on the other hand was pretty ugly, despite the outside up day yesterday we failed to gain any momentum. On the bright side we didn’t even get close to trading yesterdays lows, but still disappointing. We still have the possibility that the lows are in and that tomorrows reversal will go somewhere. But we need a close above yesterdays highs.
The same thing on corn and beans. Both closed right at yesterdays highs. We need a close above if we really want to get some momentum going. Then we really need to take out those highs from the USDA report.
For all of the markets we really need to take out yesterday’s highs and then the highs from the day of the USDA report if we want to see some momentum higher.
If we are going to see higher prices, I look for corn and beans to lead the way. The funds are near record short on both and they aren’t as nearly short wheat as they have been.
As for marketing, I am going to use today as a good spot to help manage my risk.
A close below yesterdays lows will open the downside right back up and could lead to more selling.
There is a few ways to play it. One would be to buy a put at the strike of yesterdays lows. The other way would be if we fail to go higher here, then I’d use it as a trailing stop.
A close above yesterdays highs and we could see more short covering.
When or if we rally, I could see corn going up to $4.60 pretty easily. If we could break through and hold it, it would open the door to the $4.90 to $5 range looking a little longer term.
If you need something priced in the next few weeks, $4.60 wouldn’t be a bad target. Now a $4.90 to $5 target is going to take us longer.
So if you had to price a basis contract, I wouldn’t want to be that aggressive. But if get through $4.60 I’d move that stop up…..
Listen to todays audio where we go over how you should be setting your price targets and how to use todays price action to manage your risk
Listen Here: https://txt.so/Q2o91K
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Market comments - how to be setting price targets
