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Mascoutah, Illinois | The corn market has been in a downtrend since the January highs of $4.25 in the July contract. You may be spooked into selling at the level of $3.35, but wait before you do so. I have noticed a very interesting chart pattern developing in the July contract.
January 11, July corn traded at $4.25
February 5, July corn traded down to $3.68.
The top to bottom was 57 cents.
March 1, July bounces off of the $3.68 level and trades up to $4.02.
The bottom to top move was 34 cents.
April 27, July trades from the high of $4.02 down to $3.51.
The top to bottom was 51 cents.
May 12, July bounces off the the low of $3.51 and trades up to $3.85.
The bottom to top move was 34 cents.
June 8, July trades from the high of $3.85 down to $3.35.
The top to bottom was 50 cents.
The similarites in these moves are as follows. The top to bottom moves were 57, 51, and 50 cents.
The bottom to top moves were 34 and 34 cents.
My call is we have seen the temporary bottom in July corn at $3.35 and the next leg should be up to the $3.68-$3.70 level in the July contract (33-35 cents higher). If the market continues to move symmetrically, the $3.68-$3.70 will be reached between July 1-5. This will be your chance to finish off any old crop sales.
More importantly, if this trend holds and we bounce to around $3.70, the next leg down would put us at $3.15-$3.20 which was the low last summer into early fall. The major support level I flagged in yesterday's post.
Edited by djmcountryboy 6/9/2010 01:17
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We are falling in corn, but don't panic making old crop sales.
