Technical Analysis #C-CORN : 2020-03-25

Recommendation:

Buy
Strong SellSellNeutralBuyStrong Buy

Above 359

Buy Stop

Below 331

Stop Loss

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Senior Analytical Expert
Articles 1524
IndicatorValueSignal
RSI Buy
MACD Sell
MA(200) Neutral
Fractals Buy
Parabolic SAR Neutral
Bollinger Bands Neutral

Chart Analysis

IFC Markets Tech Analysis

On the daily timeframe, Corn: D1 approached the resistance line of the short-term downtrend. It is being corrected upward from the minimum since September 2016 and is trying to return to the medium-term neutral trend. A number of technical analysis indicators formed signals for a further increase. We do not exclude a bullish movement if Corn rises above its last upper fractal and the Parabolic signal, which acts as an additional resistance level that needs to be broken: 359. This level can be used as an entry point. The stop loss is possible below the last lower fractal and the lower Bollinger line: 331. After opening a pending order, we move the stop loss following the Bollinger and Parabolic signals to the next fractal minimum. Thus, we change the potential profit / loss ratio in our favor. After the transaction, the most risk-averse traders can switch to a four-hour chart and set a stop loss, moving it in the direction of the trend. If the price overcomes the stop level (331) without activating the order (359), it is recommended to delete the order: the market sustains internal changes that have not been taken into consideration.

Fundamental Analysis

Wheat and soybeans are in high demand on the global market. Will Corn quotes follow them?

The main reason for the increase in grain prices is the return of China to the US market. As part of the first phase of the trade deal between the two countries, China pledged to buy agricultural products from the US worth $12.5 billion in 2020 and $19.5 billion. in 2021. U.S. Agriculture Department reported that so far, China has bought 756 thousand tons of American corn with delivery in the 2019/20 marketing year. This is the biggest deal since 2017. Also, an important reason for the growth of all agricultural products in price can be dockers’ strikes in the ports of developing exporting countries. They are afraid of getting infected by coronavirus and require quarantine. Particularly, the strike may begin in the largest Brazilian port of Santos in Sao Paulo. A similar demand was made by dockers of the Argentine port of Rosario and dockers of ports of South Africa. Note that corn quotes are now under pressure from low world oil prices. In the United States, 39% of corn is processed into ethanol and bio-fuels, which compete with oil. Accordingly, a rise in hydrocarbon prices may have a positive effect on corn quotes.

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