USDA Forecasts Third Largest Corn Crop on Record

Well, that didn't turn out very well. On a technical basis everything was working and we came close to our target, but yesterday a surprising USDA crop report came out with a much bigger than expected corn yield ("USDA Forecasts Third Largest Corn Crop on Record" http://www.nass.usda.gov/Newsroom/2015/08_12_2015.asp) and futures tumbled.

As we know, not all trades are winners. You might conclude we should have closed the position ahead of the report, or count it in the group of losing trades and just move on to the next one.

The options are pretty much worthless now, so I'll look to sell them on a 50% Fib retracement of the recent down move.

Corn finally popping

Good day for corn. Reset target to 396, just below the 200 SMA. Plenty of room on the stochastics for an upward continuation. Also entered a limit order for $5. Whichever triggers first is good enough for me. Don't want to scale out because there's not much time to expiration, so Theta time decay is relatively high.

My original purchase was at 5 1/2 for the Sep 4.25 Call on 7/23/15. I got an additional amount on 7/27/15 for 1 7/8 because the futures price hit the 78.6% Fib and previous resistance. So, my average cost per option is (5 1/2 + 1 7/8) / 2 = 3 11/16.

Corn consolidating

Sep Corn is consolidating around the 78.6% Fibonacci level, and previous consolidation from May/June. The big question is whether it bounces (which is what this trade is counting on) or continues the down trend. The very low stochastics suggest a possible bounce.

If we do get a bounce, we need it to bounce soon before the options expire 8/21/15 2:15pm ET.