Near Term Bullishness Tempered with Long Term Bearishness

There has not yet been the first kernel of corn planted, nor has there been a planting intentions report, nor has there been sufficient rain to ease the strain of extreme drought in the mid west, yet the corn market continues to bleed based on forecasts of an extreme buildup in the carryout.  Could there be something else here at play?

I believe the shorter term bearishness is explained by the strong rally in the dollar, and as far as the dollar goes, it is in the timing band for a move back into its daily cycle low.  I think this will provide the fuel the corn market will need to hit some minor objectives (I believe minor is all we are going to get) to finish selling old crop futures and to get substantial new crop corn sales made.

Some other tools in my tool box are also pointing to key support areas being lost with corn.  Below are what are called point and figure charts.  In a nut shell, they plot day to day price movements without the consideration of time.  The X's show price increases, and the O's show price decreases.  Only price movements of significance are plotted.  Small daily scribbles are filtered out.  This creates a chart which is a lot clearer with much of the clutter removed.  What you wind up with are pure support and resistance levels.  If you are interested, you can see how the price objectives are calculated here.

The December Corn chart shows a bearish price objective.  of $5.10 and the March shows a bearish price objective of $6.30.  Keep in mind, we will most likely run out of time on the March for this objective to be met.

There will not be a great opportunity to sell, only a minor opportunity when the dollar stalls.  I suggest you get your plan ready.