Technical Analysis #C-CORN : 2019-06-27

[IFC Markets]

Drier weather bearish for corn prices
Drier weather across US Corn Belt this week will allow more planting of corn. Will the corn prices continue declining?

National Oceanic and Atmospheric Administration forecasts relatively drier conditions this week through July 2 across the upper Midwest and Corn Belt of US. Drier weather, which allows to plant more area when rains delayed plantings, is bearish for corn prices. At the same time the United States Department of Agriculture is expected to revise downward its estimate of corn planting area in annual acreage report due on Friday. This is an upside risk for corn.

On the daily timeframe the CORN: D1 is retracing lower after hitting 5-year high in mid-June.

• The Parabolic indicator gives a buy signal.
• The Donchian channel indicates uptrend: it is narrowing up.
• The MACD indicator gives a bearish signal: it is above the signal line and the gap is narrowing.
  
• The Stochastic oscillator is falling but has not reached the oversold zone.

We believe the bearish momentum will continue after the price breaches below the lower boundary of Donchian channel at 441.30. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the upper Donchian boundary at 467.40. 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 (467.40) without reaching the order (441.30), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Technical Analysis Summary


Order Sell
Sell stop Below 441.30
Stop loss Above 467.40