The generic corn futures traded on the Chicago Mercantile Exchange (CME) is considered the benchmark for tracking this commodity closed at 666 US cents/bushel on Tuesday. After finding support at 325 cents, corn futures started to trend higher and they resumed their long-term uptrend. However, one leg of its uptrend came to a halt; after registering a new high at 799.7 cents in June 2011 and corn futures changed their direction. Ever since, the counter has been on an intermediate-term downtrend.
Within this downtrend, corn futures have been consolidating sideways from January, in a broad range between 600 and 670 cents. This sideways consolidation appears to be a positive sign from a long-term perspective. Further, we notice that the intermediate-term downtrend is coming to an end.
Corn futures are hovering well above their 50 and 200-day moving average. They are currently struggling with the hurdle in the band between 670 and 685 cents. This is a key trend deciding level. The daily relative strength index is on the brink of entering in to the bullish zone from the neutral region and weekly RSI is gradually inching higher in the neutral region. The daily moving average convergence divergence indicator is featuring in the positive territory and weekly MACD is likely to enter this territory implying upward momentum.
An emphatic jump above the band between 670 and 685 cents/bushel will take corn futures higher to 700 cents and then to 725 cents in the medium-term. Next medium-term resistances are pegged at 765 cents and 800 cents.
On the other hand, inability to surpass the zone between 670 and 685 cents can pull the contract down to its immediate support at 640 cents in the short-term. Subsequent supports are positioned at 620 cent and 600 cents.