Technically Speaking
May Corn Testing Resistance
May corn had an impressive week, posting a gain of 25 1/2 cents and testing initial technical price resistance at $5.01 3/4. This price marks the 38.2% retracement level of the previous downtrend from $6.76 1/2 through the low of $4.14 1/2. Support continues to come from a bullish commercial outlook indicated by a weak carry in the May to July futures spread (fourth study, green line), indicating the market could extend this rally to the 50% retracement level of $5.45 1/2.
However, weekly stochastics are indicating the contract is in an overbought situation above 80%. This could start to limit noncommercial buying interest in the weeks ahead. Friday's weekly CFTC Commitments of Traders report (third study, blue histogram) showed this group adding to their net-long futures position. As of Tuesday, March 4 this group reportedly held a net-long of 198,580 contracts, up 72,140 contracts from the previous week.
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