Corn Cash Index: The National Corn Price Index (NCI, national average cash price) is giving mixed signals at the end of May. The NCI took out the previous 4-month high of $4.3961 (January 2024), seemingly confirming the bullish crossover by monthly stochastics below the oversold level of 20% at the end of October 2023. All this would tell us the major (long-term) trend has turned up. On the other hand, the pattern is indicating the May high of $4.4882 might’ve been the Wave 7 (Wave B, or second wave) peak within a long-term 8-wave pattern (5 waves up, 3 waves down). The NCI closed back at $4.2579, only 1.73 cents higher for the month and the third consecutive higher monthly close. This brings to mind a possible Benjamin Franklin Fish Analogy meaning the NCI could come under pressure again during June. If all of this holds true, Wave 8 would be expected to take out the Wave 6 low of $3.8031 (February 2024). The 2024 market continues to resemble the 2014 market when the NCI posted a Wave 8 low during October. Theoretical Positions: Continue to buy cash corn as needed only, with buy stops above the May high of $4.4882.
December Corn: Dec24 also looks to be in a major sideways trend with support at the double bottom lows of $4.47 (November 2023) and $4.46 (December 2023) and resistance the December 2023 high of $5.13. If Dec24 follows the path laid out by the 2014 edition, and takes out support, the downside target would be near $3.80.
Theoretical Positions:
- Hedgers:
- Dec24 and Dec25 hedges established during 2022 and 2023 continue to be held (see Weekly Analysis).
- Some short hedges may have been lifted when Dec24 completed a bullish key reversal on its weekly chart the week of February 26 through March 1.
- If short positions are still held, new-crop short-dated July $4.60 put options were sold for 23.0 cents during March (see Weekly Analysis). These put options closed May at 6 5/8 cents
- Also, short-dated new-crop July $4.80 call options were sold for 21.0 cents. These options closed May at 5 2/8 cents.
- Dec24 and Dec25 hedges established during 2022 and 2023 continue to be held (see Weekly Analysis).
- Traders:
- Still holding short Dec24 futures after rolling from Dec23 at a strong carry during November 2023.
- Buy stops would be above the May 2024 high of $4.9675.
- Options may have been sold
- New-crop short-dated July $4.60 put options at 23.0 cents
- New-crop short-dated July $4.80 call options at 21.0 cents
Teucrium Corn Fund (CORN) still looks to be trending sideways. Theoretical Positions: None at this time. Buy stops would be above the May high of $21.07 with sell stops below the February low of $18.72.
