Corn Bulls Gain Some Upside Technical Momentum

March corn futures on the Chicago Board of Trade on Monday
hit a fresh four-week high of $3.90 a bushel. The key “outside
markets” have been bullish very recently--a sharply lower U.S.
dollar versus the other major currencies and higher crude oil
prices.
March corn has seen a price rally of around 75 cents a
bushel from the Dec. 5 contract low of $3.05 1/2. The next upside
technical objective for the corn bulls is to produce a close back
above major psychological resistance at $4.00 a bushel.
While the corn market bulls have gained near-term upside
technical momentum the past week, prices are still trading below
a downtrend from the late-June contract high of $8.16 a bushel.
It would take a price move above the last significant “reaction
high” on the daily bar chart to negate that price downtrend. That
last reaction high comes in at the $4.50 price level, scored in
late October.
From a Fibonacci technical perspective, the bulls also have
some more heavy lifting to do to provide bullish signals. The
38.2% retracement level of the price move from the contract high
of $8.16 to the contract low of $3.05 1/2 comes in at $5.01 a
bushel for March corn.
Near-term technical resistance for March corn comes in at
$4.00, at $4.16 3/4. at $4.25 and then at the November high of
$4.39 1/2. Support is located at Monday’s low of $3.74, at $3.57
3/4, at $3.50 and then at $3.40.
Look for the corn market and other commodity markets to
continue to look to the value of the U.S. dollar and to the crude
oil market for price direction.