Recommendation for Corn: Sell
Sell Stop: Below 514
Stop Loss: Above 557.3
Chart AnalysisThe #C-CORN technical analysis of the price chart in daily timeframe shows #C-CORN,D1 is retracing up toward the 200-day moving average MA(200), which is rising itself. We believe the bearish momentum will continue as the price breaches below the lower Donchian boundary at 514. A pending order to sell can be placed below that level. The stop loss can be placed above 557.3. 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 without reaching the order, we recommend cancelling the order: the market has undergone internal changes which were not taken into account.
Fundamental AnalysisTraders expect China’s US corn purchases will miss forecasts while its domestic crop is expected to rise. Will the CORN price continue retreating?
Analysts are concerned China’s US corn purchases in 2021-22 may come up short of forecasts in light of China’s absence as a buyer since mid-May and its canceling of roughly 26 million bushels (mbu) of 2020-21 purchases in recent weeks. So far unshipped sales heading into the 2021-22 crop year are on order in the amount of 480 mbu. Additionally, the 2021-22 China’s domestic production is currently estimated to be up 7.3 million ton (MT), while the increase in corn use is projected at 5 MT. Expectations of lower Chinese corn imports and higher domestic supply are bearish for corn price. Reports that Russia and Ukraine corn crop is projected 11 MT higher this year with over 90% of that increase headed for the export market add to downside risks for #C-CORN.