Corn Price Chart Update for 12.30.22
March Corn futures finished the week 12.25 cents higher and ended the month 11.5 cents higher. Price has now cleared and closed above most moving averages, and has shifted the Momentum on the MACD indicator to bullish. Gains were pared back today after the rally was met with heavy producer selling and end-of-the-year, end-of-the-quarter, and end-of-month liquidation.
Corn futures sit near the middle of the Highs that were made last May and the lows that were made in July. The highs and lows since then have become less extreme forming two trend lines. It appeared that corn wanted to break out to the top side of the resistance line but ultimately failed to close the year out.
The corn market will continue to find strength from seasonal price tendencies as those remain strong now until May/June period. Seasonals should not be used as a “one size fits all” for each year but offers a nice guideline. Keep in mind there are 2 gaps on the Corn charts. 5.92 below and 7.32 above in the March futures. I suspect if the price can break through either the top or bottom trend line price will accelerate. With option volatility at pretty low levels, I would not want to be implementing any short straddle positions.
There will be some headwinds for corn futures also. Market participants need to keep a close eye on the energy markets. Since Ethanol is a huge part of Corn demand, it is important that energy prices maintain at current levels or above. Many economists are projecting a recession sometime in 2023. Recessions do not bode well for energy prices. The key reports to watch are the weekly status reports from the EIA.
Our charts will update each time the weekly report comes out that shows Inventory and Demand data for Crude Oil, Gasoline, ethanol, and other energy products that can help build your trading narrative.
See one of the past updates here
Ethanol this week showed a decline in production and an increase in stocks, resulting in a bearish tone to the market. Margins have been under pressure lately with the drop in gasoline prices. This past week gasoline prices rebounded posting a gain of 11.1 cents on the board. This will allow ethanol plants to ramp up production again.