The Lows Are In - What Now?

I have not written a post since I called the bottom at the end of last month.  Sitting on hands is a strategy, so I have basically done nothing as far as marketing goes.  As it stands now, things are going along about as I expected.  

Corn

Corn actually bottomed a day after I called the bottom, so I was a day early.  Corn quickly bounced to the 23.6% fib before stalling out.  It has since trended sideways for the most part, but did break out of a triangle yesterday.  Barring something unforeseen, I expect prices to slowly move higher from here.  I am expecting prices to retrace $3.80 eventually.

Corn is still one of the more hated commodities.  This leaves open a lot of room to the upside.

When you look at a weekly corn chart, you will see that the oscillators are just beginning to turn higher.  This is the kind of price action you would expect to see out of an intermediate cycle bottom.  You do not want to be selling grain now if possible.

Wheat

I am mentioning wheat next as we have an active synthetic long position working with wheat that quite a few people picked up.

​Wheat did bottom on the day I called the bottom.  On Wednesday, wheat reached the 23.6 Fibonacci and bounced off like you might expect.  I think we could get some sort of pull back down to the daily cycle trend line but feel very confident in the trade.  How much premium we will keep is still not certain, but I feel pretty good that we will keep all of it.  The next Fib retracement is 38.2% which is at $4.87.  Given that the puts we sold were $4.75, I think the odds are good we will keep all the premium.

​The weekly wheat chart still looks good.  There is still a lot of room to the upside.  If you are a wheat producer, I would not be making any sales here.

Soybeans

I won't say a lot on soybeans because for the methods I use, they are just not tradable with any high degree of certainty.  Price has already reached a 50% retracement but backed off after only one day.  It looks to me that the 200 day moving average could be pretty strong resistance.  

The weekly chart is not giving many clues as to price direction either.  I am officially 75% sold on soybeans this year for the track record.  If price can reach the $10.30 area which will be near the 200 week moving average, I will sell the remaining 25%.