Buy Corn, Sell Soybeans, Wear Diamonds

 

Soybeans are at an historic high in value against Corn. The spread is turning.

 

The quarterly chart below shows the value of one contract of Soybeans minus the value of two contracts of Corn. The Soybean/Corn spread is often traded on a one-to-two ratio.

The daily chart shows that the spread could be turning. Spread charts sometimes display classical patterns. The daily chart displays a possible rounding top.

1.29_Beans minus Corn_daily

The daily Soybean chart is in a tenuous position technically. The May contract displays a possible 11-month H&S failure pattern, pending a close below the November low. A close below the January low could launch the completion of the H&S failure.

I am very close to pulling the trigger on this trade.

 1.29_soybeans_daily

 At a minimum, the May contract should test its contract lows below 1180.

$ZS_F, $ZC_F

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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