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Corn+Soybean Digest

Market Maxx: Two Trading Patterns Surface

Since the start of the Market-Maxx contest 3½ months ago, we've had impressive rallies with great trading opportunities. I'm watching a lot of different hedging styles evolve with two dominant patterns unfolding: First, the disciplined, scale-up seller who systematically sells into the market as it rallies. And second, the trader who attempts to sell high and buy low.

Here are two of my current marketing suggestions for corn and soybeans.

December Corn: From the early February low at $2.26¾ (when it was really bearish outside), prices have made an orderly advance to the recent high at $2.50. The 23¢/bu. rally is a small trading range for three months of the contest. Patient hedgers who have made no or limited sales are likely to be sitting on top — at this time.

The real challenging times are coming, as price volatility is likely to increase in the next 30-60 days. The trader who was able to sell early — lift out in early February and avoid the temptation to sell — may be on top now. But that trading mentality will be difficult to maintain in the months ahead.

November Soybeans: From the first of the year, November soybean prices fell from $5.64 to the February 4, 2005, low of $5.20. This 44¢ break has been followed by a $1.30/bu. rally (at this writing) with a possible double chart top at $6.50. The nimble trader who sold early at $5.60 lifted out at $5.20 and now could be looking at a $6.80 average price. The disciplined scale-up seller would likely have a $5.90-6.10 average. Seasonal odds suggest a possible high in mid-to-late April.

My recommendation for both corn and soybean traders: Stay disciplined and have your offers in place as volatility kicks into high gear.

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