Monthly Analysis: Corn

2023-04-02T14:31:20-05:00April 2nd, 2023|Monthly|

The Barchart National Corn Price Index (NCPI, weighted national average cash price) became more complicated during March as it posted a bearish spike reversal. The chart is thrown off by the spike rally registered during January, a move that didn’t actually happen. For now, I’m going to consider the NCPI is still in a major (long-term) downtrend with the key price the November high of $7.0428.┬áTheoretical Positions: Short from the May settlement of $7.4720 based on the completion of a bearish 2-month reversal. Additional shorts may have been added as the NCPI took out its previous 4-month low of $6.8720 during July. This puts the average short position at roughly $7.1720.

December Corn: The major trend remains down, with short Dec22 positions rolled to Dec23 during November 2022. The Dec23 contract closed march at $5.6650, down only 3.25 cents for the month after hitting a low $5.4750. The downside target heading into March was between $5.45 and $5.40. With monthly stochastics below the oversold level of 20%, we need to be on the look out for a bullish reversal pattern.

Theoretical Positions:

  • Short Dec23 from roughly $6.1425 (November 15).
  • Previously short Dec22 from the May close of $7.1150
    • Bought back on November 15 at $6.6675 for a gain of 44.75 cents
    • Raising the short Dec23 position to roughly $6.59
  • Previously Sold Dec22 $5.90 put options for approx. 56.0 cents (July 13)
    • Stopped out at approx. 6.0 cents (September 23) for a gain of roughly 50.0 cents

The Teucrium Corn Fund (CORN) closed higher for the month, but I still see it in a major 3-wave downtrend meaning it needs to move below its previous low of $22.87 (July 2022). The next downside target is $20.91. Theoretical Positions: Longs were sold at the May 2022 close of $28.22 based on the completion of a bearish key reversal.

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