No one can argue the negative price impact that the USDA’s August Supply Demand had on grains and oilseeds. December corn was trading @ 387 ½ at 11:00am as the report was release last Thursday, August 10th. By 1:00pm the market had dropped over 17 cents to $370 ¼. November Soybeans tumbled from the 11:00am price of 987 to 938 ½. December wheat broke from 485 ¼ to 467 ¼. Corn has since stabilized in a 5 cent range while Soybeans and Wheat have drifted an additional 10 cents lower. But do not despair! Weekly charts are here!!
As you can see from the weekly charts below, we are testing long term support. These markets have held these approximate values in the past. Is it going to support again? Obviously time will tell, but I would suggest listening to what the market has said in the past as an indication of what it may do in the future. There’s still sufficient uncertainty in this year’s growing season to allow for some price volatility.
I watch charts for a reason. They are unemotional and suggest historic price tendency. You still need to use strict money management with this idea as well as any other trading strategies you might employ. It doesn’t matter if you use stops on futures positions or long option strategies. The key is maintaining your discipline. Any idea is a good idea until the market tells you you’re wrong. Be a good market listener and trade with The Edge.
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.