The December contract for corn futures represents this year’s harvest delivery. Last August, the 2017 December contract hit a low of 358.50, or $3.58 ½ per bushel of corn. Since then, the price of corn traveled higher into this year’s planting season; and on July 11th, some bullish (or less bearish) supply and demand figures helped push this contract to new 2017 highs at $417.25.
Since that high in July, corn has seemed to lose favor, once again dropping below the $400.00 level, or $4.00 per bushel, while losing more than a third of the gains from the last 52 weeks. It appears that corn is at a critical moment moving into the latter parts of the summer growing season.
The light blue shaded region across the chart below highlights the $375 to $385 area that has been a magnet for price over the past year, and that has provided support or resistance at various times. Currently, the ZCZ17 is trading near $380, which is the mid-point of this shaded area. Also noted on the chart is the 50% marker of the 52-week range, which comes in at $387.75.
The hypothesis is that if corn holds the $375 support at the bottom of the highlighted area, it should travel back up to the 50% marker at around $387.75. We anticipate some resistance there at first touch. If price is able to convert the $387.75 level into support, then we would look for a push back to the big round $400 price.
If price should fail the $375 support zone, then we would look for a push down to the contract low of $358.50 going into harvest time this year.
Traders should be aware that this is a very volatile time of year in the grain markets and should keep abreast of potential market-altering reports, including a WASDE/Crop Production on August 10th.