Spring time first brings the daffodils, then the tulips. The trees start to flower and everything looks incredible. So much so that you almost forget about the snow that was there just 3 weeks before. But if you live in Ohio (or most of the mid west) it also means planting time for corn.
Soon after it starts to germinate and emerge. And soon after that farmers are all over what is happening to corn prices. Corn prices have been moving lower for over 3 years so farmers have hopes for a turn to the upside. The early price action suggests that they may get their wish.
The chart above shows corn's weekly pattern for the past 3 years. (you can follow the corn ETF Teucrium Corn (NYSE:CORN)) Making a bottom after the 2014 harvest, corn has held in a consolidating range since then, with a short jump higher in the middle of last summer. After that pop it continued lower in a channel. Until last week.
That's when it broke the channel to the upside. It also crossed over its 100-week SMA, something it had not done since that mid-summer jump last year. The Bollinger Bands® are opening higher and momentum is swinging bullish. The RSI is now in the bullish zone and the MACD is crossed up and rising.
This picture supports a move higher. It may or may not happen, but the path of least resistance is for prices to rise. Moving over a price of 450 would be significant and confirm a reversal higher. A fall back into the channel signals a failed move higher.