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. Confirmation of a Wave B (second wave) rally would be a move beyond the 4-month high of $7.0538. The index finished December at $6.8245. Theoretical Positions: Short from the May settlement of $7.4720, with additional shorts 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 January 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 December at $6.1075 with a downside target near $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 Barchart National Soybean Price Index (NSPI, intrinsic value of the market) is in a major 3-wave downtrend with the ongoing rally off the Wave A low (October) of $12.9987 looking to be Wave B. This move could lead to a test of the target area between $14.65 and $15.17 during December and possibly January. Once Wave B peaks, the Wave C target remains near $12.20. December’s settlement of $14.9271 was the third consecutive higher monthly close, bringing to mind a Benjamin Franklin Fish Similarity (Like guests and fish, markets start to stink after three months of moving against the major trend). This could lead to renewed selling into a Wave C. Theoretical Positions: Short from the June settlement of $15.9058 based on the completion of a bearish key reversal. Additional shorts may have been put in place with the move to below the previous 4-month low of $15.1946 during July. If so the average short would be roughly $15.55.
November Soybeans: The major trend remains down, with short Nov22 positions rolled to Nov23 during October. The target is the July 2022 low of $12.8850. Theoretical Positions:
- Short Nov23 from roughly $13.5975 (October 12)
- Previously short Nov22 from the June close of $14.58 (the completion of a bearish key reversal)
- Bought back on October 12 at $13.96 for a gain of roughly 62.0 cents
- Raising the short Nov23 to about $14.1275
- With a stop above the previous 4-month high of $15.0875
- Previously sold Nov22 $13.40 put options for approx. 55.0 cents on August 3
- Stopped out at approx. 9.0 cents on September 23 for a gain of roughly 46.0 cents