Technically Speaking

December 2024 corn had a tough start in 2024, falling 57 1/2 cents in the first 57 days of the year to a low of $4.46 on Feb. 26. Since then, prices have rebounded and closed at $4.70 3/4 on March 15, slipping a cent and a half on the week. In the bigger picture, December prices lost $3.20 from the $7.66 peak in May 2022 to last month's $4.46 low and have returned to an old level of resistance near $4.50 a bushel. Factoring in today's higher production costs, a current price of $4.46 a bushel translates to $3.38 a bushel before COVID-19, a price that would have been close to long-term support in the years from 2014 to 2020.

Just four weeks ago, specs held a record-high net-short position in corn of 266,067 contracts. Friday's report from CFTC for March 12 pegged net shorts in corn down to 189,030 -- a 29% reduction as specs appear to have second thoughts about being so heavily short.

Fundamentally, it is not clear yet if Brazil's safrinha corn crop will have enough soil moisture to survive the coming dry season and the uncertainty of an entire U.S. growing season lies ahead. Technically speaking, it is too early to say, but December corn could be forming a double bottom with a previous low made in the December 2023 contract on Nov. 29, 2023. Sustained closes above the February high of $4.81, if that happened, would suggest a change in the 22-month downtrend as we near the seasonal change to spring.

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Comments above are for educational purposes only and are not meant as specific trade recommendations. The buying and selling of commodities, futures or options involve substantial risk and are not suitable for everyone.

Todd Hultman can be reached at Todd.Hultman@dtn.com.

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