Corn Tech Update

A wild week as futures and cash markets converged heading into May delivery, sending old crop futures and spreads soaring. The most active July contract finished the week up 40c and the month up $1.28. Volatility ran rampant this week as ranges expanded and July hit its daily limit in three of five sessions. The question now is can this momentum be sustained with May futures off the speculative board and the U.S. quickly ramping up planting?

Despite the limit gains today July futures remain under contract highs. For now. This keeps Tuesday’s blow-off top confirmed. Closing up limit and synthetically 10c higher than that should put futures testing the contract highs come Sunday night.  But until those highs are breached Tuesdays top and subsequent reversal still look impressive. Daily volume has also been on a steady decline since Tuesday, indicating new bullish momentum might be fading.  

That being said, the trend is higher and a close under the recent trendline and 12-day exponential moving average at 626 is needed to shift momentum lower. Continuation prices blew through the old 2013 gap, topped at 625, and have added over 1$ since. The cluster of old highs from 730-800 has been the next upside target area, which Ck21 reached at the close today, is CN21 next?

Corn prices have been on an incredible rally this month as cash markets run up old crop, while mounting concerns in Brazil and the need for a great U.S. growing season build risk premiums. Expect more volatility as we begin the U.S. growing season and navigate through what should be torrid old crop demand. Stay tuned.