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Daily Commodities Update: Corn

ByAutoChartist
Published 07/04/2011, 08:46 AM
Updated 03/09/2019, 08:30 AM

Last week’s extremely bearish USDA crop report sent the entire grain complex into a free-fall, with corn leading the way towards the lows for the year. Major technical damage was done to the corn chart in the process. The market had already been showing signs of weakness, but was holding tenuously at support near $6.50 per bushel and trading sideways to higher prior to the report.



This pre-report price action formed a Channel Up chart pattern for the nearby corn futures, as illustrated on this 240-minute candlestick chart. The report knocked the price down well below the channel support immediately following its release. Extreme momentum ensued as funds liquidated and sell stops were triggered.

The technical breakout from the Channel Up chart pattern projected a forecast for corn to trade all the way down to $6.04 per bushel at a minimum, with the lower end of the forecast at $5.73 if the follow-through selling accelerated.

Friday’s trade found some short-covering action to bring the market marginally higher, back towards the underside of the channel. A continuation of the bearish price action to start the trading week ahead would put the market on track to retest the lows, and drop to the forecast price level to complete the breakout pattern.

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