Technical Analysis #C-CORN : 2019-04-26

[IFC Markets]

No boost for corn prices yet

Corn US demand estimate was lowered in April WASDE report. Will the corn prices continue declining?

The USDA lowered corn demand estimate in its monthly World Agricultural Supply and Demand Estimate released on April 9. It revised downward estimates of 20018/19 US feed and residual use, ethanol production as well as export. Ending stocks were raised 200 million bushels to 2.035 billion as supply was kept unchanged. At the same time global production forecast for 2018/19 was raised by 5.3 million tons to 1,377.2. Weak demand and higher supply expectations are bearish for corn. On the other hand planting delays are an upside risk for the price.

On the daily timeframe the CORN: D1 is below the 200-day moving average MA(200) which is flat.

• The Parabolic indicator gives asell signal.
• The Donchian channel indicates no trend yet: it is flat.
• The MACD indicator gives a bearish signal: it is below the signal line and the gap is widening.
• The Stochastic oscillator is rising from the oversold zone.

We believe the bearish momentum will continue after the price breaches below the lower boundary of Donchian channel at 351.0. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the last fractal high at 370.8. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (370.8) without reaching the order (351.0), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Technical Analysis Summary


Position Sell
Sell stop Below 351.0
Stop loss Above 370.8