I am cautiously bullish with corn now. We have buy signals on the nearby corn chart, as well as Dec 2013 corn, but there is no denying now that the 200 sma has been pierced. Notice on the March corn contract, price has filled the gap left from July 5, and has completed a 50% retracement from the May low.
With corn basis levels running .27 above its 3 year average, it makes sense at least to be locking up basis contracts on any 2012 corn available.
The most depressing thing for me at this point is how new crop corn looks Technically speaking, new crop corn does not look very good. Prices have retraced 61.8% of the advances it had made since the June rally began, and are now .25 below the 200 SMA.
Near term, however, I am bullish. A buy signal will be given soon from the CCI.
We are going on week 15 for the current corn cycle. The average corn cycle lasts around 12.5 weeks. Corn is in the timing band to print an intermediate cycle low and a yearly low.
When will we know we are at the beginning of a new cycle? We can feel confident that the market has bottomed once a weekly swing low has occurred at the same time as we break the declining trend line which would be around $7.20 March.