A look at the December corn-only continuous monthly chart and we see it resembles a similar pattern to what I recently talked about with cash corn: new-crop futures continue to climb but have not cleared the previous high of $4.73 (June 2019) as 2020 came to an end. Yes, new-crop corn is in a major (long-term) uptrend with the initial signal being the bullish crossover below the oversold level of 20% by monthly stochastics at the end of May 2020. However, the next month saw Dec 2020 posted a bullish key reversal as it move to a new low of $3.22 before rocketing well beyond the previous month’s high of $3.4250 before closing at $3.5050, up 11.75 cents for the month. However, note what happened immediately after that as July saw the 2020 contract fall back to $3.2550 before an August low of $3.20 (the good old Round Number Reliance in corn). At that point, though, Dec 2020 corn turned on its heels to post an August high of $3.6425 before closing at $3.5775, and the contract never looked back. Dec 2020 finished November at $4.1975 before handing the baton to the 2021 issue that closed December at $4.3475 after posting a high of $4.36.
Is new-crop December corn overbought? Sure it is, with monthly stochastics already well above the 80% level as 2020 came to a close. Will this slow the buying interest in the market? Not by a long shot, probably.
As I mentioned in my analysis of cash corn’s monthly chart, major trends tend to last a year or more, here the “long-term” moniker. Technically, this major trend began with the key bullish reversal last June meaning it could last through at least June 2021. However, we need to keep a close eye on out for a bearish reversal pattern with the both June 2019 and August 2012 showing bearish spike reversals to cap major uptrends. Until then, the initial upside target would be near $5.19. Beyond that the targets are $5.82 and $6.45. But first things first, namely the June 2019 high of $4.73.