May corn futures at the Chicago Board of Trade on Tuesday hit a fresh two-month high of $4.06 a bushel. Tuesday’s price action also re-established a four-week-old uptrend line on the daily bar chart. The corn market bulls have gained fresh upside near-term technical momentum with Tuesday’s strong upside price action. Now, it will be important for the bulls to show follow-through buying strength this week. The next upside price objective for the corn market bulls is to push and close May futures prices above solid technical resistance at $4.18. Above that lies strong chart resistance at the January high of $4.39 1/2, basis May futures.
On the downside, strong technical support for May corn futures is located at $3.85. A close below that price level would deflate the bulls. Above that level does lie chart support at $3.95 and at $3.90. Importantly, the corn market and the other grains will continue to be heavily influenced by the key “outside markets” that include the U.S. stock market, crude oil and the value of the U.S. dollar against the other major currencies. On Wednesday morning, those markets are postured in a bearish fashion for corn, as the dollar is firmer, while crude oil prices and the U.S. stock indexes are lower.–Stay tuned! Jim Wyckoff