Monthly Analysis: Corn

2023-02-01T12:21:22-06:00February 1st, 2023|Monthly|

The Barchart National Corn Price Index (NCPI, weighted national average cash price) remains in a major (long-term) 3-wave downtrend that began with a bearish 2-month reversal during April and May 2022 (red arrow on chart). The next downside target for the NCPI is near $6.0175, the 38.2% retracment level of the previous uptrend from $2.7265 (April 2020) through the April 2022 high of $8.0515. We need to discount the January 2023 high of $7.6499. I was watching the market start up that night and somehow posted an absurdly high number. Unfortunately there is no way for me to take it off the chart. Based on other cash indexes I am still counting the November 2022 mark of $7.0428 as the 4-month high. Theoretical 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 with a February stop above the previous 4-month high of $7.0538.

December Corn: The major trend remains down, with short Dec22 positions rolled to Dec23 during November. The Dec23 contract closed January at $5.9075 with a downside target near $5.60, then $5.43. 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 with the peak of Wave B (Wave 7 on this chart, second wave of the downtrend phase) occurring this past October at $28.05. Wave C (or 8) is expected to take out the Wave A (6) low of $22.87 from July 2022. The next downside target is $20.91, the 50% retracement level of the previous major uptrend from $11.52 (May 2020) through the high of $30.30 (April 2022). 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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