December 2021 (Dec21) corn futures (the benchmark for 2021 corn production) finished the week higher by 6.25-cents (~1.52%), settling at $4.1850/bushel. This week's price action took place in a 9.75-cent (~2.37%) range. All of this week's trading took place in the unremarkable band we published last week, though the week's high of $4.1925/bushel was within a half-cent of the notable band we published last week. Additionally, $4.1925/bushel represents a new 52-week high for the Dec21 corn futures contract.

Our corn demand index was up 2.91% this week. Fundamental discussions should still note increasing concerns over COVID-19, uncertainty surrounding future executive branch policy, and the Georgia Senate races. These three factors continue to provide potential sources of volatility. They are of particular concern where they might impact U.S. and Chinese trade relations.

Technically speaking, Dec21 corn futures remain in an uptrend that started from the August lows. Both daily and weekly momentum indicators are in overbought territory. Some of the various momentum indicators we watch indicate considerably overbought conditions. The contract high at $4.25/bushel looms slightly over the market.

As always, regardless of your fundamental or technical view, we recommend careful and deliberate risk management - not speculation.

The short-dated options market for the 2021 crop year remains relatively illiquid. However, there is reasonable liquidity in the Dec21 options expiration. We continue to hold a few near-the-money short-dated March puts to protect our Quartzite Precision Marketing clients until the spring price begins setting in February. Implied volatility for options on the 2021 corn crop strengthened again this week. We still see the most value in the May short-dated new crop options. Implied volatilities are near levels we consider to be fair-to-expensive. As such, we would look to use the minimum number necessary to manage production uncertainty. Additionally, liquidity concerns could prevent establishing positions at favorable levels. See the chart below for a comparison of our closing at-the-money model volatilities for this week and last.

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Looking ahead to next week's holiday-shortened trading for Dec21 corn futures, we would consider movement within the $4.1175-$4.2600 per bushel range to be unremarkable. Notable moves would extend to the $4.0225-$4.3800 per bushel range. Price action beyond that would be extreme. We will return to publishing a chart of these levels versus price action after the new year. Be sure to visit our Twitter page to vote in the poll we hold there each week. While you are there, please give us a follow.

Looking at the Spring and Fall prices for crop insurance this week, both distributions shifted slightly higher due to this week's rally and higher implied volatilities. See the charts below for distribution and cumulative probability charts for both the Spring and Fall crop insurance prices.

This week we added a short article to our Tools and Tactics page on the Greek known as "theta." Please take a look, and tell us what you think!

Thanks for taking the time to read. We look forward to your questions and feedback. Please feel free to contact us via our contact form, Facebook, Twitter, email, or phone at (970)294-1379. Thanks again. Have a great week.