So on the September 26 post, I described a scenario where I felt corn would grind higher out of an inverse head and shoulders bottom. I still believe this scenario is in play. I expect price to reach a level between 3.66 and 3.70, which is between the 38.2% fibanacci level and the 200 day moving average. This happens to coincide with the level where the inverse head and shoulders would need to trade to confirm as an H&S.
When price reaches this area, I will recommend to price all 2016 corn. At that level, we will have all 2016 corn and soybeans priced.
I just wanted to recap the grain sales we have made up to this point.
We completed all soybean sales in June which I re-capped on June 21. We averaged $10.61 for our efforts. No further sales have been made.
On June 8, I recommended selling 10% of the 2017 soybean crop at $10.05.
The corn marketing has been much more challenging. Although I was anticipating a powerful move to the upside, I did not anticipate a crop size as was being predicted which sent corn into a death spiral. There were several mistakes I made which made the task of marketing the corn more difficult. This is why a brokerage account is important. I like using brokerage primarily as a means to cover mistakes on the cash side.
Back on June 10, I recommended placing an order to sell 25% of your corn at $4.45. This order was hit. Mistake #1 was that I did not recommend selling 100% of the corn. Mistake #2 happened on June 23 when I recommended lifting the hedge. The hedge did net .10 per bushel, but could have yielded so much more.
On June 23, I recommended selling $4.00 corn puts as a way to add some premium to your pocket. Again, this would be a mistake. I believe corn will continue grinding higher as I have contended all along, but by the time the puts expire, I doubt they generate much in the way of revenue. We have to wait until November 18 before we will know for sure.
On August 30, I called the bottom in corn and recommended re-ownership on paper. This would pan out to be a day early, but within a penny of the bottom. Rather than claim re-ownership however, we took a long position in oil to mimic what would need to be done to gain .84 in corn..... enough to get the cash price back to $4.00. This would mean that oil would need to reach $50.50 which happened on October 10. I recommended this because the fundamentals of corn were extremely bearish, while the fundamentals in oil were bullish. To a greater or lesser degree, oil and corn tend to trend together.
We still have physical bushels to sell, and we still have puts which we sold before making any final tally's on price. What we do know is that my recommendations gained .10 from the June hedge, plus another .84 from the synthetic long, meaning we have .94 to add to the final corn price. My target is at $3.65, which if hit means the total net price for corn would 3.65 + .10 + .84 + .05(remaining credit from the puts we sold) = $4.64. That would be a great price despite the mistakes which were made along the way.
Unfortunately, we did not get any 2017 corn sold so far this year.