December corn futures at the Chicago Board of Trade on Monday posted a fresh 20-month low of $3.64 a bushel and then rebounded to close higher and near the session high. Price action Tuesday morning was showing modest follow-through buying, but with prices well off the overnight high of $4.09 3/4.
This week's price action does encourage the bulls just a bit, as it's this time of year that generally puts in a harvest low. Seasonal studies do show corn futures prices bottoming out in the November timeframe and then moving higher into the end of the year.
Also, the Moving Average Convergence Divergence (MACD) indicator overlaid on the daily bar chart for December corn futures has recently produced a bullish line crossover signal, whereby the MACD line of the indicator crossed above the "trigger" line of the indicator.
However, the bulls have much more work to do to in the near-term to gain better confidence that a harvest low is in place. December corn prices are still in a four-month-old downtrend on the daily bar chart. It would take a solid price move above the last "reaction high" in the downtrend, which is last week's high of $4.27 3/4, to negate the downtrend on the daily chart.
A close back below strong near-term technical support at this week's low of $3.64 in December corn would produce fresh chart damage to suggest a challenge of strong chart support at $3.50 a bushel, or below.