In the business world, “risk” is often the nastiest four-letter word in the book. As a result, finding effective hedging techniques to protect asset values and profitability is a common pursuit for people in a wide variety of industries. Due to their inherent flexibility, futures products are especially useful for hedging. The applications of futures… Read more.
Corn chart damage was obviously done on Friday, following USDA’s Prospective Plantings and Quarterly Stocks reports delivered bearish surprises. After that drubbing, however, corn has held in relatively well so far this week.
US Dollar strength relative to South American currencies is likely hampering old crop exports in the near term, but managed money funds remain at record short positions combined in corn, soybeans, wheat.
The “SELL” button was getting hit at the 50 day moving average these past three days in corn, throwing some cold water on the short covering party.
Moving averages are one of the most basic yet most meaningful indicators out there for potential price support or resistance, in my opinion. Another basic tool is trend lines. When they match up together, I’m taking notice.
Now that the index funds appear to be willing to cover at least some of their extreme short positions in grains, what are some potential technical price targets to consider for the next round of sales or hedges?
“Index Funds” have the deepest pockets of anyone in the futures markets. That’s why it is so insightful to know how they are positioned relative to historical standards.
We’ve seen the grain markets weak through last summer/fall delivery and it appears no different for March contracts this week.
Bulls showed their jitters as hopes for a China trade deal cooled off, following a more positive tone earlier this week.
Technical trading or hedging opportunities are present in several of the markets (corn, soybeans, wheat, etc.) we follow.