Though this is Weekly Analysis of December corn only, I’ve attached the contract’s short-term daily chart.
Trends:
- The major trend turned down at the end of May with the establishment of a bearish spike reversal on the continuous monthly chart.
- The secondary trend remains down on the contracts weekly chart.
- However, the minor trend on this daily chart turned up last week following the bullish spike reversal on Wednesday, May 26.
- The upside target was between $$5.5275 and $5.8525, with the contract already hitting the 50% retracement mark of $5.69. The overnight high was $5.7050.
- Based on corn’s Round Number Reliance, the contract could move past the 61.8% target near $5.8525 and make a run at $5.90. This will likely be enough to pull daily stochastics above the overbought level of 80%.
Seasonal:
- December corn tends to post a high weekly close the first week of June, this week.
- However, the 2008 contract extended its uptrend through the last week of June
- Old-crop 2020-2021 corn continues to show the strongest stocks-to-use correlation to 2007-2008
Fundamentals:
- New-crop corn fundamentals remain bullish, as indicated by the weak carry in the Dec21-to-July22 forward curve.
- This could keep buyers interested in the market through the early part of summer, possibly the end of June.
Theoretical Position:
- Those who bought short-term puts ahead of the May WASDE report have likely sold those back for a profit.
- New sales could be put in place with a test of $5.90, though we need to keep bullish fundamentals in mind.
- We also need to watch daily stochastic for signs the minor trend is turning down again.
