Monthly Analysis: Corn

2023-04-30T09:59:24-05:00May 1st, 2023|Monthly|

The Barchart National Corn Price Index (NCPI, weighted national average cash price) extended its major (long-term) 3-wave downtrend to a low of $6.0483 during April. This was a test of support at $6.0174, the 38.2% retracement level of the previous major 5-wave uptrend. With monthly stochastics still partially above the oversold level of 20%, there is time and space to move lower. The 50% retracement target is near $5.40. Theoretical Positions: Short from the May 2022 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 2022. 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 extended the downtrend to $5.2150 before closing at $5.2775. Technically, next support is near $4.90 though buying might be seen at the round numbers of $5.20 and below. Monthly stochastics are well below the oversold level of 20%, possibly limiting downside potential.

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) remains in a major 3-wave downtrend. Wave 8 (of the combined cycle of a 5-wave uptrend and 3-wave downtrend) is expected to take out the Wave 6 low of $22.87 with the next downside target $20.91. This price marks the 61.8% retracement level of the 5-wave uptrend. 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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