December corn futures at the Chicago Board of Trade on Friday closed sharply lower, near the session low, hit a fresh 4.5-month low and closed at a bearish weekly low close. The market has been pounded lower recently, amid bearishly postured "outside markets"--sharply lower crude oil prices and a stronger U.S. dollar versus the other major currencies. Grain traders will continue to look to these two key outside markets for direction.
A steep six-week-old downtrend line is in place on the daily bar chart. The next downside price objective for the corn bears is to push and close December futures prices below major psychological support at $5.00 a bushel.
The bulls' next upside price objective is to push and close prices above solid technical resistance at $5.50. First resistance for December corn is seen at $5.25 and then at $5.30. First support is seen at the March low of $5.13 1/4 and then at $5.00.
While the corn bulls do have the near-term technical advantage, the market is presently technically oversold on a near-term basis and due for a corrective bounce very soon. The 14-period Relative Strength Index overlaid on the daily bar chart for December corn shows a reading of 25.48. Any RSI reading below 30.00 does suggest a market that is overdone on the downside and due for at least an upside correction. The present RSI reading is the lowest in the history of the December 2008 corn futures contract.