New Highs in Corn
Corn probes above $6 for the first time since 2013
Farmers will favor beans
Keep an eye on gasoline and ethanol prices
Corn continues to pop going into the planting and growing seasons- It’s all about the weather
Backwardation as the market has high hopes for 2021 output
In late April 2020, the corn price fell to its lowest level since 2008 when the continuous corn futures contract found a bottom at $3.0025 per bushel. The pandemic pushed prices lower across all asset classes. Corn is the primary ingredient in US ethanol production. The ethanol mandate that requires a blend of gasoline and biofuel in the US closely ties corn’s price to crude oil and gasoline. In April 2020, crude oil fell below zero to a low of negative $40.32 per barrel. Gasoline prices declined to 37.60 cents per gallon wholesale in March 2020, the lowest price since 1999. The price carnage in the energy sector and selling in all markets pushed corn to the $3 level where it found a bottom.
Last week, corn moved to its highest price since July 2013 at nearly double the April 2020 low. Nearby May futures probed above the $6 per bushel level.
Corn probes above $6 for the first time since 2013
On April 15, corn futures put in the most recent high when they traded to $6.015 per bushel on the nearby March futures contract.
The chart highlights eight consecutive months of gains in the corn market as of mid-April 2021. A close above the $5.6425 level at the end of April will mark the ninth straight monthly price increase in the coarse grain.
Open interest, the total number of long and short positions in the corn futures arena has been rising with the grain’s price. Increasing open interest as the price of a futures market rises is typically a validation of a bullish trend. Monthly price momentum and relative strength indicators are in overbought conditions, but they continue to rise. Monthly historical volatility at 22.31% signifies the rally is slow and steady.
Corn futures are bullish, with the price at its highest level since July 2013. The next upside target is $7.30 per bushel, that month’s peak, which is a gateway to the 2012 $8.4375 all-time high in the corn futures market.
Keep an eye on gasoline and ethanol prices
The US ethanol mandate ties corn’s price to gasoline. The US is the world’s leading corn producer and exporter. Corn is the input into US ethanol processing. In Brazil, sugar is the input. Like corn, sugar prices have been rallying over the past months as the demand for ethanol rises with gasoline prices.
The chart shows that gasoline futures rose from the lowest price of this century at 37.6 cents per gallon in March 2020 to the highest level since 2018 at $2.17 per gallon in March 2021. Higher gasoline prices have pushed ethanol to a multi-year peak.
The monthly ethanol futures chart illustrates that the biofuel’s cost has risen to its highest level since December 2014 at $2.01 per gallon. Higher ethanol prices support higher corn prices.
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CORN
Cattle and Corn: An Obscure Spread With Interesting NumbersAn interesting spread here. I’ve traded this one on and off over the years. It’s a long-term hold and some years this spread just has a nice smooth trend.
Think of this spread as a cost of carry, in a way. Or perhaps: wholesale versus retail is a better way to look at it.
Feeder Cattle (young moo cows) + Corn (food) + time equals Live Cattle (grown up ones).
It’s like that math parents do when say “do you realize how much it costs to have a teenager and send him/her to college?”
In futures we can trade that, for cattle and corn at least. We can see where base cost of production is over or undervalued and with a bit of patience, these kinds of trend trades reveal themselves.
This one has a great seasonal pattern. That is, it tends to repeat itself each year. Not every year, but most years. Research says selling Feeders and Corn and buying live Cattle can be quite profitable. On average, an entry late April and exit late Sep has been profitable every year since 2005.
From 2006 onwards: 100% strike rate, average profit $3374 for one spread.
Formula:
(+2*400*Live Cattle) – (1*50* Corn) – (1*500 * Feeders)
Essentially it says one contracts of feeders (50000lbs) plus one of corn (5000 bushels) makes about two live cattle (80000lbs).
Some also trade a 1 Corn: 2 Feeders and 4 Live Cattle. Its’ essentially halving the corn requirement from above.
Remember, there are no rules in spread trading. Our job is to find the correlations and trade them.
Risk:
Hmmm, there are two ways to look at that. The stats say the worst drawdown in the last 15yrs in $5400 and that is about double of most other years in that time. So it’s not a small risk trade.
The other way is to eyeball a chart. That recent move from +2000 to 0 did not take long at all. Unless get a well-timed entry, then stops will have to be wide - a few thousand at least (about 3.3 times ATR). It’s one where you would start with a wide stop and bring it in should you see some equity.
Entries and exit need finesse since it’s not an exchange traded spread. Experienced spreaders only, with knowledge of seasonality. In you are new to these kinds of spreads, mark it down as market knowledge and come back for a look later on.
BTC bull pron for us degensA couple different scenarios based off historical break of previous ATHs. Being citibank predicted 318k .... unprecedented money printing.... multibillion dollar corps buying.... leads me to think the corn blows past 318k. Maybe even outpace the 2013 bull run.
I would not be surprised to see a market cap similar to gold..... at a 10 trillion cap, that would imply $476,000/btc
I'm personally not see much retail fomo on the streets yet, which leads me to believe the parabolic blowoff is still 6-9 months away. When grandma starts asking about bitcoin, prepare to exit. lol
Goodluck humans.
CORNHUB! Bitcoin through March and beyondI'm honestly just not feeling this rally yet. I don't even want a breakout right now.
I would prefer we reset all technicals at $42k before we make the next move up.
To be clear about the green and red bubbles, those are in reference to the key of Bitcoin: DCA (dollar cost averaging)
Red means wait to DCA later. Green means stack sats. SO....
HODL on comrades, don't trade BTC!! You'll get REKT. BTC gives AF about short/midterm TA, so just stack and HODL.
Bitcoin ONLY respects the 4 year halving cycles and will rip your face off if you try to get cute.
Follow this chart, hit that like button, tell me what you think about this short term analysis and give me a follow!
Thanks!
(Calling Bitcoin "Bitcorn" is a meme, if you see people talking about the price of "corn" they probably mean BTC. Get yourself some more corn so you won't be hungry later!!)
Corn Price has reached to its highest level since 2014Ascending channel in weekly chart is going to be broken soon, since RSI is 75, and RSI divergence has formed, technically we expect to see the price in lower levels soon but fundamentally it is still likely to go up to the end of march. But I doubt price goes up more than 600 since Argentina is going to terminate its export ban since the coming week and COVID-19 cases are going down gradually either in USA or China.
Bitcoin 15 minute chart breaking out of channel??I'm seriously not feeling this breakout. Looking for rejection at any of the lines on this chart, or a H&S reversal. I'm as bullish as they come about Bitcoin, I'm just expecting a 42k rebound before getting our faces melted off again. If you think this bull run is over, look at the BLX weekly chart and zoom WAYY out to see all time prices. This cycle is far from over. We have gains coming well into next year.
Naked Bitcoin through AprilStrictly price action indicators.
Bitcoin is in the midst of a full on bull cycle.
Don't short BTC.
Expect a more than likely touch of the 21 EMA, and a possible touch of the 50 EMA.
Don't expect anything below $42k unless you are expecting a big correction. I don't think it needs one here.
The most bullish outlook has Bitcoin retesting that upper trend line at the 2.618 extension by early march, which would be a doubling in price in just around 3 weeks which is hard for even myself to imagine.
I am looking for almost 100k by end of April.
Corn: A Potential Fade Approaching Corn seems to be in the final stage of a bullish run here. In terms of % gain, it is almost at the psychological 100% increase area from Mar'20 low. Short risk exposure is becoming more risky at these levels. With another push higher, some decent supply inflows are expected.
$600k BitcoinDon't look at me,
talk to the chart, bro.
The chart says what the chart says.
I used fibonacci extensions to create this unquestionable chart.
Is it time to short the Corn Market???CBOT:ZC1!
In recent times most commodities have been heavily inflated. So when is it time to short these things on a macro scale? Well, if seasonality tells us anything, typically corn prices start to fall once we enter the month of June.
There are 2 areas of supply on this chart, 1 of which we are already sitting in while the other is sitting at 627-680.
Rising agricultural prices bode well for NutrienWith prices for corn futures, wheat and soybeans on fire, the prospects for fertilizer companies like Nutrien have never been better. The stock trades at only 1.4x book value and pays a 3.5% dividend yield. Earnings surprises (like the prior two quarters) are likely to continue.
Bearish rising wedge on CORN after the extended runOn the daily time frame of CORN, there is a nice looking bearish rising wedge. It has been a quite a run and now it has gone up too quickly. RSI is reading extreme over bought. PPO is poised to make a bearish high level cross over. Also, when it falls back into the price channel, it will be very bearish as it will be a bull trap. I entered long $11.60 range so it's time to take profit and reversing to short. Long term bullish but short term bearish.
CORN Possible Long UnfoldingCorn has been on a rip lately. Today we have a nice pullback. If CORN cant hold the $15.79 level I expect to see somewhere around $15.00. Due to a confluence of support with the current upwards trendline, the horizontal support from the past and the 50 day simple moving average all being in the same area I will look to lean in off the bounce (if it happens).