||↑ 13 cents
||↑ 10 cents
||↑ 02 cents
||↓ 02 cents
||↑ 12 cents
||↓ 06 cents
||↓ 0.65 points
Corn has broken the four-year-old downtrend line at the $3.75 level based on the lead month (March) contract.
From this point, we wait and see if there is a short covering rally by the funds in the next week or so. If we do have the rally towards the $4 level based on the May contract, we should come back to the $3.75 area in the next few weeks to test this trend line for support, also based on the May contract. Initial support is now at $3.70 on the May contract while overhead resistance is at $3.95 - $4 also on the May contract. Short term indicators are positive and the main, or primary trend, is now neutral.
Not much change this week as we hit our projected resistance at the $10.80 level on the May contract. The next 10 to 15 cents hold good resistance as we should soon see a correction in price. We are on the verge of negating the six-year-old down trend line and a close above $11 should confirm the break. Meanwhile, a pullback to the support level of $10.20 is quite doable. Initial support is seen on the May charts at the $10.20 level while our overhead resistance level is still at the $10.75 - $11 level.
Short term indicators are positive and the primary trend is neutral. A close above $11 would be very positive and indicate an end to our bear market.
The May contract is hitting resistance at the $5.20 level but continues to impress as we are now ready to pullback before an assault on the $5.20 trend line that separates the downtrend line from a breakout and trend reversal. January 2 of this year gave us a strong red buy signal on the weekly charts and we should see yet another short covering rally if we can close above the $5.25 level on the May contract.
A possible move back to the $4.75 level on the May contract is possible but not necessary as the momentum may not allow the prices to settle back that much before another attempt at the 10-year-old trend line is challenged. Indicators are positive. Both daily and weekly indicators are now bullish, and our primary trend is neutral with a strong bullish bias if we can close above the $5.25 price on the May contract.
Cash Grain prices as of the close, March 7, are as follows: SWW @ $238.66 ($6.50/bu), HRW @ $233.91/MT ($6.37/bu), HRS @ $248.62/MT ($6.77/bu), SRW @ $231.54/MT ($6.30/bu).