July corn futures (ZCN25) present a buying opportunity on fresh price strength.
See on the daily bar chart for July corn futures that recent trading action has been sideways and choppy. Bulls can argue that the corn futures market has held up surprisingly well given heightened U.S. trade tensions and fears that U.S. grain export demand could plummet if other major global economies take retaliatory action. The corn market’s resilience recently suggests underlying price strength. Also, it’s likely that global trade tensions have already been mostly factored into corn futures prices. Remember, too, that futures traders tend to factor into prices worst-case scenarios regarding matters such as the trade tensions. Yet, worst-case scenarios are usually never realized.
In the coming weeks, U.S. corn planting will commence. Arguably the most critical time fame for the growing cycle in corn is the early July pollination period, where hot, dry and windy conditions can curb corn-production potential. History shows that more years than not some degree of a weather-market rally in corn futures occurs during the growing season, with most of those weather scares occurring during the first half of the growing season.
See at the bottom of the daily chart for July corn that the moving average convergence divergence (MACD) indicator has moved into a bullish posture as the red trigger line has crossed above the blue MACD line, with both lines starting to trend higher.
A move in July corn futures above chart resistance at this week’s high of $4.72 1/2 would give the bulls fresh strength and it would also become a buying opportunity. The upside price objective would be $5.00, or above. Technical support, for which to place a protective sell stop just below, is located at $4.60.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%):
Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
