Technical Analysis #C-CORN : 2019-09-23

[IFC Markets]

Firm demand bullish for corn price
US export sales were stronger than forecast. Will the corn price continue rising?

The US Department of Agriculture World Agricultural Supply and Demand Estimates September report was mildly supportive for corn: it lowered the yield estimate, but also raised the amount of 2018 crop corn leftover on September 1. On the demand side export sales the week before the last were better than expected: 63.5 million bushels were even stronger than forecast due to heavy buying from Mexico, and purchases from Japan. Higher demand is bullish for corn prices

On the daily timeframe the CORN: D1 has been rising after hitting 4-month low in the beginning of September. It is below the 200-day moving average MA(200).

• The Parabolic indicator has formed a buy signal.
• The Donchian channel indicates uptrend: it is narrowing up.
• The MACD indicator gives a bullish signal: it is below the signal line and the gap is narrowing.
  
• The RSI oscillator is at about 50 level and has not reached the overbought zone.

We expect the bullish momentum will resume after the price breaches above the upper Donchian bound at 376.8. A price above that level can be used as an entry point for a pending order to buy. The stop loss can be placed below the fractal low at 368.1. After placing the pending order, the stop loss is to be moved to the next fractal low, following Parabolic signals. By doing so, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (368.1) without reaching the order, we recommend canceling the order: the market sustains internal changes which were not taken into account.

Technical Analysis Summary


Order Buy
Buy stop Above 376.8
Stop loss Below 368.1