Corn Tech Update
Grain Market Commentary
Wednesday, July 17, 2019
by Jacob Christy, Freedom Program Trader, The Andersons
A quiet session for corn as traders wait on the weather. Dec19 futures traded within yesterday’s range, finishing the day near unchanged, in lack luster volume. All signs indicate trade awaits further stimulus. Weather is the main driver, but trade is also keeping a close eye on some key chart points.
Dec corn still appears to be working on a head and shoulders formation, but the downside reversal pattern has yet to be confirmed. A trendline connecting the July lows, and the May contract low, has held price breaks all month. This support has kept the head and shoulders formation open, which in turn is keeping bear confidence low. This trendline could be the fork in the road of the short-term technical outlook.
On one side falling below this trendline opens the door for a test of the open chart gap near 420. Fill the gap, and the head and shoulders reversal are completed, indicating a return to sub 400 futures. A sell-off could quickly compound given current market construction. On the other side, holding the trendline and sustaining price action above 455 works to debunk the head and shoulders formation and could give enough chart-based buying confidence to begin the next leg higher.
The corn market is on edge. Uncertainty over new crop supply is gripping trade discussion. It’s no surprise prices have turned choppy. Weather should continue to drive prices but don’t sleep on the technicals as the charts, like the crops they represent, sit at teetering point.