Monthly Analysis: Corn

Corn Cash Index: The National Corn Index (NCI, national average cash price) extended its major (long-term) downtrend to a low of $3.7459 during July before closing the month at that mark, down 15.72 cents for the month. This has the index in position to complete a bullish reversal during August, creating a Wave 8 trough and turning the major trend up. Theoretical Positions: Continue to buy cash corn as needed only. End users need to be on the lookout for a bullish reversal pattern to be completed during August confirming a new major uptrend.

December Corn: Dec24 extended its major downtrend to a low of $3.9775 before closing July at $3.9975, down 21.0 cents for the month. As with the index, this leave Dec24 in position to complete a bullish reversal pattern during August, confirming a move to a new major uptrend.

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 July at 31 2/8 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.
    • For the record, open orders to sell Dec24 $4.00 put options at 20.0 cents would’ve been filled on August 1 when the premium spiked to 21.25 cents
  • Traders will also be keeping an eye on a possible bullish reversal during August, confirming a move to a major uptrend.