Monthly Analysis: Corn

2023-05-31T18:18:33-05:00June 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 $5.7818 during May before closing at $6.2820, up 10.37 cents for the month. Technically, this completed a bullish spike reversal meaning the major trend has turned up. Monthly stochastics established a bullish crossover, though slightly above the oversold level of 20%. Theoretical Positions: Those looking to cover cash needs can do so near the May settlement of $6.2820. There is still a chance the NCPI could fall back to near $5.40, so put options might be bought against cash purchases.

December Corn: Dec23 extended its major downtrend to a low of $4.9075 before rallying to close the month of May at $5.2175. This was 6.0 cents below the April settlement of $5.2775. Technically this means a bullish reversal pattern was not completed, unless one wants to employ the Horseshoe Proximity (Close is close enough). Note the monthly low was a test of the target near $4.9150, the 61.8% retracement level of the previous uptrend. Also, monthly stochastics established a bullish crossover below the oversold level of 20%, a signal the major trend should soon be turning up.

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) extended its major 3-wave downtrend to a low of $21.90 before rallying to close May at $23.10, won $0.28 for the month. Like the Dec23 contract, this could be close enough to employ the Horseshoe Proximity and view May’s activity as a bullish spike reversal. Again, though, no clear reversal pattern was completed. ¬†Theoretical Positions: If new longs are established near the May close of $23.10, based on the Horseshoe Proximity, then sell stops would be placed below the May low of $21.90. Those not rolling the dice will stay on the sidelines until a clear reversal pattern is completed.

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