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Corn prices currently have several layers of technical support on the most active chart. Immediate trendline support is following the 20-day moving average, currently at $4.48 3/4. Beyond that, the 61.8% Fibonacci retracement sits at $4.40 3/4. For a medium-term pivot point for prices, traders should keep an eye on the 50-day moving average, which currently sits at $4.34 1/2. Prices last traded to this average on Nov. 1 and historical trends tell us sooner or later, futures will revert to this mean. How traders and prices react on a retest of this support will be telling on the strength of corn’s trend at that point.
For upside potential for corn, obviously a lot of momentum will be determined by the fundamental picture, particularly in South America as world ending stocks currently sit among their tightest in the past decade. The obvious next round of price resistance is $4.60 in nearby futures. Based on trade over the past three sessions, it appears traders may be wanting to wait for USDA reports on Friday for further assurance before being willing to potentially send prices into 2024 highs and beyond. If bulls can achieve a 100% retracement to $4.75 1/2, and close above $4.72 1/2, it would open the market up to price levels not seen since the fall of 2023.
Looking at the weekly chart for the most-active corn futures, prices are just over 20 cents below the 100-week moving average at $4.81 3/4 and dropping. Corn futures have not sustained a move above this level since February 2023, but prior to that had only one single weekly close below this level since late September 2020. Essentially, this represents long-term trend support or resistance, and it can be guaranteed that, if and when prices challenge this level again, traders will be very conscious of the level’s significance and will need appropriate fundamental reasoning to drive prices beyond and back toward $5.00.
Comments above are for educational purposes only and are not meant as specific trade recommendations. The buying and selling of commodities, futures or options involve substantial risk and are not suitable for everyone.
Rhett Montgomery can be reached at [email protected]
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