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Advisor

Corn technicals: 'whipsaw risk'

New wire story today (full story) looks at corn technicals, cautioning traders to keep an eye on $7.32 1/4. "Given volatile and thin Hurricane trading conditions, whipsaw risk is seen," the DowJones report said. "It would take sustained losses and a close or two under the $7.32 1/4 level to confirm a downside breakout."

 

A wave of fresh selling could occur in that case, according to the report.

 

"First technical target on the downside on a break of $7.32 is the $7.05 floor. On the upside, short-term resistance lies at $7.49 3/4. If the market climbs back above that level early this week it would keep the sideways range trade intact and target a drift back toward the range top," DJ said.

 

How's that sound? Thoughts?

 

John

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3 Replies
Senior Advisor

Re: Corn technicals: 'whipsaw risk'

I would expect physical fundamental factors to mitigate against in strong downward selling pressure. Technically, in the span of a few short days, anything could happen. The question is whether it is material in any longer term. If 5 M US acres are out it is probably because of mud in the eastern CB. With more rain from Sandy it is going to be freeze up before a lot of progress is made. Count on China to buy big on any dips because S America isn't a definite situation with some doubts. They are buying feed wheat, soy and milling wheat. I'll guess they have largely tapped out the Aussies for feed wheat.  They'll continue to buy corn.

 

I just don't see a big downside here.

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Honored Advisor

Re: Corn technicals: 'whipsaw risk'

5 million unharvested acres and 120 bushel yield brings us to around 600 million bushels.......somewhat close to the ENTIRE projected carryover number......... We are gonna need to harvest that last 5 million acres now aren't we?

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Senior Advisor

Re: Corn technicals: 'whipsaw risk'

With the short crop I'm harvesting, it's my plan to hold on to it for better prices.  Technically based moves down will be of no interest.  

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