Monthly Analysis: Corn

Corn Cash Index: The National Corn Index (NCI, national average cash price) remains in a major (long-term) downtrend, with the renewed selloff looking to be Wave 8 (last wave of the combined 5 waves up and 3 waves down). Given this, the NCI is expected to take out the Wave 6 low of $3.8031 from February 2024. The NCI posted a low of $3.9031 during late June before finishing at that price, down 35.48 cents for the month. The 2020 to 2024 time frame continues to show a similar pattern to 2010 through 2014 when the NCI posted a low of $2.8147 during October before completing a bullish spike reversal that month. Theoretical Positions: Continue to buy cash corn as needed only, with buy stops above the May high of $4.4882.

December Corn: Dec24 extended its major downtrend to a low of $4.12 before closing June at $4.2075, down 46.25 cents for the month. By taking out the double bottom of $4.47 (November 2023) and $4.46 (February 2024), the downside technical target is near $3.80. This was established by taking the range from the November 2023 low to the December 2023 high ($5.13), 66 cents, and subtracting it from the breakout below the February 2024 low.

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 were bought back at 4.0 cents (June 11) for a gain of 19.0 cents.
  • Also, short-dated new-crop July $4.80 call options were sold for 21.0 cents. These options were bought back at 3.0 cents (June 11) for a gain of 18.0 cents.
  • At the end of June, hedgers might’ve sold Dec24 $4.20 put options for 20 cents. If so, these options closed June at 24 1/8 cents.
• 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. These were bought back at 4.0 cents (June 11).
    • New-crop short-dated July $4.80 call options at 21.0 cents. These were bought back at 3.0 cents (June 11).
  • Traders may have orders to sell Dec24 $4.00 put options at 20.0 cents based on
    • The long-term downside target of $3.80
    • The previous major sideways range between $3.20 and $4.20 from October 2014 through November 2020.