Corn Tech Update

The corn market has trended sideways to lower over the past two weeks with little fresh news to support much of a market correction to the upside. As we find ourselves starting the crop insurance, momentum indicators are starting to point toward some relief. Today’s close was weaker than hoped, but the continued selling pressure appears to have subsided for now.

If we take a look at the slow stochastic, we can see that the market is starting to signal a cross that generally leads to a recovery out of oversold territory. This is illustrated at the lower portion of the chart and the cross encapsulated by the red circle. In order to confirm the momentum shift; we look to continued strength in the overnight followed by a higher close than yesterday to create more confidence in the signal. Technicals continue to struggle to provide clarity as the market volatility has mainly been generated by an ever-changing fundamental landscape. That being said, fundamentals have not shifted in any material way from two weeks ago to view this price action as abnormal order-flow.

As with most analysis, corn will need cooperation from soybeans and wheat in the overnight to complete and confirm the correction. Look at today’s high trade as the first level of resistance followed by the 50-day moving average represented by the orange line. Pressing through these levels may create some additional covering for any recent short position the funds have accumulated in this break.