Corn at 7 year highs Will it continue

The July Corn contract made new highs (again) today, above 7.20. Soybeans are a stone-throw away from the April 27^th highs of 15.74 per bushel. The same can be said for Wheat, which is nearing its April highs at 7.69 per bushel. Commodity prices have been rising across the board, from all-time highs in lumber to all-time highs in copper and iron ore.

However, the rise in corn is notable for quite a few reasons, which suggest the grain may have more room to go on the upside:

With the reopening of economies after the coronavirus, demand in general is high.
Due to lack of rainfall in Brazil, coupled with lows corn stock, supply is lower and can’t keep up with demand
China (1): Because of the deterioration of the hog herd last season due to the swine flu, China is trying to rebuild the herd. This is resulting in extra demand.
China (2): Though China cancelled 5.5 million bushels of corn from the US, Joe Biden stated that he wants to get China back to the table to review how they are doing regarding “Phase One” of the trade deal agreed to under the Trump Administration.
Although the Federal Reserve claims that the current inflation is “transitory”, inflation is here at this moment (and may be here to stay)
With the US Dollar continuing to move lower, it makes commodities cheaper to buy for other countries.

What do the technical say?

On a weekly timeframe, it’s easy to see that Corn has been on fire since last summer 2020, rising from 3.01 to near 7.20. However, there is resistance just above at the 78.6% Fibonacci retracement level from the August 2012 highs to the April 2020 lows, near 7.28. Above there is horizontal resistance from the lows of August 2012 near 7.74, then the highs of August 2012, near 8.43.

Source: Tradingview, FOREX.com

However, note that on the weekly timeframe the RSI is near 88, which is considered extremely overbought. Therefore, with the near-term Fibonacci level above and the overbought RSI, it is quite possible that corn prices may pull back. On a 4-hour timeframe, the July contract put in a low of 6.45 on April 30^th and put in all-time highs today near 7.20. Horizontal support is below near 7.04, and then the 38.2% Fibonacci retracement from the April 30^th lows to the May 6^th highs near 6.97. Below there is the 61.8% Fibonacci retracement from the same timeframe a gap-fill near 6.74.

Source: Tradingview, FOREX.com

Corn prices appear as if bulls may try to push them higher, given both the fundamentals and technicals. However, don’t be surprised if it pulls back first given the overbought conditions on the weekly timeframe.

Learn more about commodity trading opportunities.

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

StoneX Europe Limited is registered with the German Federal Financial Supervisory Authority (BaFin). BaFin registration ID: 10160255

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

The statistical data and the awards received refer to the Global FOREX.com brand.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

Additionally, StoneX Europe Ltd is allowed to provide Investment and Ancillary Services to the following non-EU jurisdiction: Switzerland.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

Tied Agent Information: KQ Markets Europe Ltd with Company No. HE427857.
Address: Athalassas 62, Mezzanine, Strovolos, Nicosia Cyprus.
Services Provided: Reception and Transmission of Orders.
Commencement Date: 06/12/2022
Website: KQ Markets - CFD Trading | KQ Markets

We may pay inducements, such as commissions or fees, to affiliates or third-party introducers for referring clients to us. This is in line with regulatory guidelines and fully disclosed where applicable.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.