A bearish flag pattern was formed on Corn’s chart and once broken, it would likely signal that lower prices beckon.
The sharp rally in July saw a swift reversal in price, back to the origin of the rally.
This cluster of support at 360- 364 is the level where we expect prices to test in the coming weeks.
A break below this support band would point to a lot more weakness for Corn in the upcoming weeks. In the immediate term, we see prices bounced off its flag support a few days ago.
This bounce could potentially take prices up to 385.25-386.75 (from the current 380 levels), where both are previous fourth wave extremes at lesser degrees.
The 50%FR also comes in at about 386. So the cluster of 385-387 could act as a magnet to draw prices towards it.
We expect a reversal within the said band with a longer term outlook for a move back below 372.00 to retest the key support band of 360-364. Corn remains a sell on strength in the immediate term as long as 399.75 stands.
A move above the said 399.75 level would signal that a more complex corrective rebound may be taking place. (Read Report)
Source : CIMB Research