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CORN Technical Analysis - CORN Trading: 2015-10-01
Waiting for Grain Stocks report
US Department of Agriculture publishes official grain stocks quarterly estimates on Wednesday. The report is expected to boost corn price volatility. Will the price of corn continue rising following the report?
US Department of Agriculture releases its Grain Stocks quarterly report on Wednesday. It will provide estimates for stocks as of September 1, end of the 2014-15 marketing year for corn and soybeans. There are expectations that corn inventory figure may be revised upward from current estimate of 1.732bn bushels by about 20 million bushels , which is the shortfall of actual exports from officially expected exports of 1.875 billion bushels in 2014-2015. Investors also are trying to estimate the impact of poor corn yield reports from eastern Corn Belt together with strong crop yield reports from further west. They point to the possibility that the update may repeat the pattern of pervious lower-than-expected quarterly stock reports. The range of estimates varies from 1.652bn bushels to 1.852bn bushels. A significant adjustment to previous estimate may boost corn price volatility.
On the daily timeframe corn price has been rising after hitting the support following the decline from annual peak in mid-July. It is consolidating in a triangle it has formed and the parabolic indicator gives a buy signal. The Donchian channel is tilted upward. The RSI-Bars oscillator is also rising and hasn’t reached the overbought zone yet. We believe the bullish momentum will continue after the price breaks out of the triangle and closes above the upper Donchian channel at 396.8. A pending order to buy can be placed above that level. The stop loss can be placed below the last fractal low at 377.8. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level without reaching the order, we recommend cancelling the position: the market sustains internal changes which were not considered.
| Position | Buy |
| Buy stop | above 396.8 |
| Stop loss | below 377.8 |
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