The corn market has found some harvest strength. We first suggested this in, mid-October in, "Commitment of Traders Report to Turn Positive in Corn Futures." Our tone has changed recently as reported in, "Corn Rally Stalls on Commercial Selling." The CFTC's Commitment of Traders Report shows that the area between $3.60 and $3.80 was heavily traded among the commercial traders. Based on our experience, the price levels that previously acted as support will now act as resistance. Commercial traders have a habit of reverting to the mean. This behavior should result in enough commercial selling on this rally to offset the long hedges that were initiated on the way down, thus providing enough selling pressure to cap prices near these levels.
It turns out that, like last week's Bond market trade, the corn futures market wants to do it on its own timing. Like the Bond trade, the corn trade is a big picture trade. Therefore, the initial timing isn't as important as its continued monitoring for opportunities.
Thanks to Friday's trade, the opportunity is here.
See our full analysis at Traderplanet.com
Register - For a free 30-Day trial of our discretionary COT Signals
