Corn Could Get Interesting This Week

It should be interesting what happens to the price of corn after this Thursday’s USDA numbers. The monthly chart shows corn being positive the last 4 months and flat for May so far. Seasonally, one would expect corn to keep its price level or rise going into June. What is of concern in the monthly charts is that price is re-testing an area that is has touched a handful of times over the past few years with RSI and Stochastics being in the overbought territory.

When you look at the weekly chart, the past 3 times RSI was in its overbought zone (above 70), declines were seen each time shortly thereafter. The latest pullback was not as severe as the summer declines in 2015 & 2016 when RSI was also overbought. Another item of interest this year is volume. According to the CME Group, corn futures volume through April was up 25% YTD and corn options volume was up 11% YTD.

Maybe this year when corn was near 400 in March, the farmers locked in their prices early and the summer months may not be as volatile, OR maybe demand for corn will finally appear and corn will break out of the range that it’s been trading within the past few years. Only time will tell, but the charts are looking overbought for now.