Technical analysis: Will the corn price continue retreating?

Dmitry Lukashov IFC Markets

Recommendation for Corn: Sell

Sell Stop: Below 678.5

Stop Loss: Above 712

RSI: Neutral

MACD: Sell

Donchian Channel: Sell

MA(200): Buy

Fractals: Sell

Parabolic SAR: Sell

Chart analysis

The CORN technical analysis of the price chart in a 4-hour timeframe shows #C-CORN, H4 is falling toward the 200-period 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 678.5. A pending order to sell can be placed below that level. The stop loss can be placed above 712. 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 canceling the order: the market has undergone internal changes which were not taken into account.

Fundamental analysis

USDA upgraded its estimate for corn ending stocks in the WASDE report. Will the CORN price continue retreating? USDA’s May 2021 World Agricultural Supply and Demand Estimates (WASDE) report upgraded world and domestic corn ending stock estimate. USDA forecast for world-ending stocks for 2021/22 was estimated at 11.508 million bushels, 3.3% higher than the average estimate by analysts prior to the publication. At the same time, domestic ending stocks for 2021/22 were estimated 19.9% higher compared with the 2020/21 figure at 1.507 billion bushels. At the same time, WASDE predicted US corn exports would decline 325 million bushels during the 2021/22 marketing year. Higher ending stock and lower export estimates are bearish for corn prices.

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Author

Dmitry Lukashov

IFC Markets

Dimtry Lukashov is the senior analyst of IFC Markets. He started his professional career in the financial market as a trader interested in stocks and obligations.

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