December corn futures on Monday did produce some tepid follow-through buying interest following last Friday's limit gains. However, price action Tuesday morning is showing stronger selling pressure to suggest the recent price strength was just a short-covering bounce in a market that wants to continue to trend lower.
Importantly, the key "outside markets"--crude oil and the value of the U.S. dollar against the other major currencies are exerting a major influence over the grain futures market at present, especially crude oil prices. The fact that crude prices have dropped well below what was major psychological support at $100.00 a barrel is now sucking speculative money out of most commodity markets, including the grains. It's likely that grain traders will continue to focus more on the outside markets in the near term and less on grain market fundamentals. And it's likely the outside markets will continue in a bearish posture for corn and the other grain markets for the near term.
Technical resistance for December corn is located at Tueday's high of $5.65 a bushel, at $5.75 and then at $5.80 3/4, which is the top of a downside price gap created on the daily bar chart on September 2. A push above $5.80 3/4 would provide the bulls with fresh upside near-term technical momentum to suggest that prices can trend sideways to higher in the near term.
Technical support for December corn is seen at Tuesday's low of $5.43 3/4 and then at last week's low of $5.31. The next downside technical objective for the corn bears is producing a close below last week's low, which would then suggest a challenge of the August low of $5.04 1/2 and even major psychological support at $5.00 a bushel in December futures.