Buy Corn, Sell Soybeans, Wear Diamonds
- Posted by PeterLBrandt
- on January 29th, 2014
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.
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.
At a minimum, the May contract should test its contract lows below 1180.
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.blog comments powered by Disqus
Peter Brandt entered the commodity trading business in 1976 with ContiCommodity Services, a division of Continental Grain Company. From his start in the commodity industry, Peter's goal was to trade proprietary funds. But, he first needed to learn the business. More »