July corn futures at the Chicago Board of Trade on Wednesday hit a fresh four-month high of $4.34 a bushel. Prices are in a steep three-week-old uptrend on the daily bar chart and the next upside price objective for the bulls is to produce a close above the January high of $4.49 1/4 a bushel. Above that lies strong chart resistance at $4.72 1/4, basis July futures. A close above that chart level would open the door to a challenge of major psychological resistance at $5.00 a bushel. Importantly, should July corn futures post a close above $4.72 1/4, technical resistance levels become fewer and farther between–meaning bigger daily price moves are likely, both on the upside and on the downside.
click on the chart to enlarge
The corn market bulls would become deflated by a close below major psychological support at $4.00 a bushel, basis July futures. Importantly, corn and the rest of the grain futures markets will continue to keep one eye on the crude oil market. Crude oil has been a leader in the commodity markets for quite some time. If crude oil prices can continue to trend higher, then corn and the grains will very likely be pulled along for the ride. However, if crude oil starts to back down, the corn market and the grains are likely to do the same.
Stay tuned! Jim Wyckoff jim@jimwyckoff.com
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