Like so many other markets in the grain and oilseed complex, the December 2021 corn contract looks to have established a bearish spike reversal on the continuous monthly chart for Dec corn only. May saw the 2021 issue post a high of $6.38 before falling to a low of $5.0025 and closing at $5.4550, down 18.25 cents from April’s close of $5.6375. The end of April was also interesting in that the close was far enough off the monthly high of $5.93 for monthly stochastics to establish a bearish crossover above the overbought 80% level. Given this, May’s move now looks to be confirmation of a new major (long-term) downtrend signaled by the previous month’s crossover, the end of the line for the cog train’s uphill journey.
All that being said, the previous uptrend pattern doesn’t look completed. I know trends come in all shapes and sizes, but this one was relatively short-lived for a major trend, lasting only since the low of $3.20 from August 2020. If December corn has established a long-term top, the downside target area is between $5.1650 and $4.4125, with May’s low already dipping below the initial target. Fundamentally the market remains long-term bullish, as indicated by the weak carry in the corn futures forward curve.
The 2022 issue closed May at $4.8725 after hitting a high for the month of $5.3425.
