Trading in a rangebound market

By Jon Scheve, Superior Feed Ingredients, LLC

The market is stuck between buyers looking for $4 corn and farmers wanting $4.20. In 79 of the last 84 trading sessions, or since the June 28stocks report, December corn has traded at some point during the session in a tight 30-cent trading range between $3.95 and $4.25. Of the 5 days that the market did not trade in that range, 2 were above the top end while 3 were below.

It’s hard to find a reason why this will change before the end of the year. Harvest is wrapping up, yields are looking fantastic, and export pace remains strong at current values.

At the end of July, December corn was trading at $4.05. Considering the June USDA stocks and acre estimate, and the good weather up to that point, it seemed most likely corn would be rangebound, or drop slightly, through harvest. Therefore, I made the following trades to maximize some profit potential if the market stayed sideways or went lower through harvest.… Continue reading