March corn futures at the Chicago Board of Trade have seen prices rebound from the early-February low of $3.47 1/2 a bushel. While the bulls have more work to do to suggest a price uptrend can be sustained, there are early technical and seasonal clues that a market low is in place. The Moving Average Convergence Divergence (MACD) indicator overlaid on the daily bar chart for March corn shows that recent price action has produced a bullish line crossover signal, whereby the MACD line has crossed above the “trigger” line of the indicator. Both lines are now trending higher, which is also a bullish clue.
From a seasonal price perspective, the rebound from the February low does begin to suggest that the “February Break” phenomenon has run its course. The February Break in the grains refers to a timeframe in mid-winter when grain futures prices tend to weaken to varying degrees, depending on the year. However, corn futures bulls need to keep their foot on the gas to suggest the fledgling price uptrend from the February low is something more than just a corrective bounce. Producing a weekly high close on Friday would be one technical clue to better suggest a market low is in place in the corn market.
Stay tuned! Jim Wyckoff jim@jimwyckoff.com
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