Corn futures were volatile early in the summer, but with harvest time approaching, the picture for this market has become range bound. For the past few months, we have touched on the technical picture for corn every couple of weeks using the chart below as the foundation of our view.
Overall, the technicals for corn look weak; but given that the bulls have stopped the selling momentum and that seasonality favors a bounce in October, we will once again look at this market going into a critical time of year.
Since late August, when corn met resistance at the 23.6% Fibonacci retracement level, this market has been unable to gain momentum. It is in the bears’ favor that the only rally in the market has been extremely modest. Furthermore, a lower high at the end of September also weakens the technical picture.
On the chart, price is wrestling with the lower trend line in blue, which is now around the $349.00 area. Ownership of this line is critical for both bulls and bears.
If buyers are able to hold that line, they will first target the upper trend line in orange that is currently coming in at the $357.00 area, and next target the September high at $362.00.
Meanwhile, if sellers win this trend line, then the natural target would be the contract low for this market, which is $344.25; and if that low breaks going into the harvest, a Fibonacci extension of this year’s range suggests that price could go to the $327.00 level.
Corn traders should be aware of the very important WASDE (World Agricultural Supply and Demand Estimates) report scheduled on October 12th at 12:00 p.m. EST (next Thursday).