ZC1! corn at Yearly S1 pivot pointCorn futures are testing strong support at the Yearly S1 pivot point. The Yearly P to S1 pivot points is a textbook algorithmic move.
ZC1! trade ideas
Corn Prices Fizzle on Bumper HarvestCorn prices have fallen 14% since the start of 2023. The latest USDA report points to further downside. Corn prices are expected to fizzle with expectations of a bumper harvest combined with tepid demand.
The USDA expects a record harvest of 15.27 billion bushels. The 2023/24 forecasts signal rising corn supply boosting ending stocks to their highest level since 2016/17.
To hedge against falling corn price, this case study proposes a short position using CME Corn Futures (ZCN2023) expiring in July with an entry of 586.25 and a target of 433.25, which is hedged by a stop loss at 654.25, is likely to yield a reward-to-risk ratio of 2.25x.
RECORD CORN HARVEST IS ANTICIPATED RESULTING IN SOARING ENDING STOCKS
WASDE, short for World Agricultural Supply and Demand Estimates, is a monthly report released by the US Department of Agriculture (“USDA”) that tracks the supply and demand for various agricultural commodities.
In the latest WASDE report, released on May 12th, USDA expects a record 15.3 billion bushels of corn to be harvested in the US this year.
The US is the largest producer of corn, representing 32% of total global production. Global corn production is expected to rise 6% YoY in 2023-24.
While production is robust, demand and consumption are not expected to grow as fast. Global demand is expected to rise 3.7% with US consumption expected to climb 3.4%. This will result in an oversupply of corn with soaring inventory levels (i.e., Ending stocks).
Ending stocks represent the supply of corn that is carried over to the next year. They are expected to rise 56% YoY to 2.2 billion bushels, the highest level since 2016-17. This leaves plenty of supply to accommodate any demand expansion.
A bumper harvest in October is expected to cause an oversupply pushing corn prices lower.
Despite the recent decline in corn prices, they remain significantly higher than pre-pandemic levels. With ending stocks now expected to reach pre-pandemic levels, prices will likely follow.
WEATHER MAY UPSET BUMPER HARVEST EXPECTATIONS
The WASDE estimate assumes stable weather conditions as well as demand assumptions regarding China.
Weather conditions play a huge role in final harvested yield. In the current year, drought conditions & intense heat in Argentina led to lower crop yields. With extreme weather events rising globally, it is possible that unfavorable weather may reduce the final US corn output.
China is the largest consumer of corn. With hopes of strong economic recovery still simmering, demand in China may spike higher than USDA expectations.
If supply fails or demand spikes, Corn prices may remain steady or even rise.
Asset Managers and Options Markets are positioning for Corn price to plunge
CFTC’s Commitment of Traders Report shows that asset managers have more than doubled their net short positioning in Corn futures over the last twelve (12) weeks.
Other reportable traders have reduced their net long positioning by almost 50% in the same period. Both indicate rising bearishness about corn prices.
Similar sentiment is reflected in the options market. Although June and July contracts have Put/Call ratio of ~0.85 (more calls than puts), this is before the bumper harvest is expected (August-October). The September and December contracts which expire after the harvest have a Put/Call ratio of ~1.2.
The futures forward curve, which is in backwardation, also shows expectations for prices to drop following the harvest.
TRADE SETUP
Each lot of CME Corn Futures provides exposure to 5,000 bushels of corn. A short position in CME Corn Futures expiring in July (ZCN2023) with an entry of 586.25 and a target of 433.25, which is hedged by a stop loss at 654.25, is likely to yield a reward-to-risk ratio of 2.25x.
• Entry: 586.25 ¢/bushel
• Target: 433.25 ¢/bushel
• Stop: 654.25 ¢/bushel
• Profit at Target: USD 7,650
• Loss at Stop: USD 3,400
• Reward-to-risk: 2.25x
MARKET DATA
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Corn Fibs, gans and speedfans I made this a while ago. It’s crazy to think how well fibs are in the market. Time and price accuracy is on these fibs gans and speedfans. And they can change time frame if you zoom on and add a fib to these fib levels. One single fib can go down to the minutes. You can doubt me either. I’m here to say it’s facts with out being humble. Humble me in the comment with constructive criticism
Crop market forecastCrop dropped through the bottom after concernes about shortage switched to the low moving price down fast. If trader have big deposit he is already a buyer. If smaller he is waiting for a news and mean reversal pattern to develop to have a setup for a buy. Giving current situation in Commodities market it could take weeks for a price to respond to a buyer activity. Meanwhile hedgers and farmers are unloading their positions. Buying is justified if trader could wait and maybe buy more during said reversal and could take solid losses. Price action still looks dangerous for a buyer, sellers could trigger bigger drop in such market. Still what is happening in Crop is inretesting this is cleraly a price artefact which could be exploited for a solid profit.
Continuous CornContinuous Corn – Weekly: (Busy Chart) Currently in a sideways grinder going into an acres battle and Weather Market. Do not hesitate to Make decisions. The Red downtrending pitchfork controls the trend. Nearby resistance against the upper red line is set up with the 6.93 retracement target but volume by price resistance at 6.75-6.80. If the red line is broken for a short time look at further retracements that coincide with the lower blue line on the uptrending pitchfork. (7.24, 7.68, and 7.94) Theoretically the blue uptrend fork is still in play as long as the dashed gray uptrend line is not broken. Should we break below 6.23 then we most likely will see a test of the median line before we see 7.00 again. Median red line support in the 4.50 area targets Dec futures this Fall… **Many If/Then scenarios at Play**
Volume by price acts as a magnet. Currently the 6.75 area is pulling it up and would be resistance. The next volume spike by price is the 5.50 area and then the 4.25 area. This will act as support/risk moving forward as contract months roll forward...
CORN FUTURES Weekly Technical AnalysisZC1! Weekly - No RECOMMENDATION or ADVICE Status / EDUCATIONAL only - Support, Resistance, Trend Lines, Cluster, Confluence, Pitchfork, Modified Schiff Pitchfork - Hope it Helps, Good Luck
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Corn Futures Have Negative Weekly MA SlopesCorn has dropped below the 100, 20, and 9-week simple moving averages, all of which have rolled over to have negative slopes. The most notable is the 100sma. When it has a positive slope, it appears to act as support, but once the slope turns negative, price can go vertically down as it did in 2013. Another noteworthy item is the 45 week time span from peak to drop in 2012/2013. The current distance from the 2022 peak is 49 weeks, a time span which is comparable to 45 weeks for technical analysis purposes.
As a swing trade, a short entry should be executed as soon as possible, a stop should be placed above last week's high, and the target is near the bottom of the previous vertical drop, in the $4.50 to $5.00 range. MACD is used to colorize the bars. It’s also worth noting that the daily chart has its own bearish setup, with price having just rejected the 200, 100, 50, and 9 moving averages simultaneously. They also have negative slopes.
Daily:
Comparing May (left) and December (right) price action for 2023, it can be observed that the December contract appears to be showing more weakness which would suggest longer-term bearish expectations are starting to be priced in.
P.S. The level we're at is the same level that it dropped vertically from last time.
XC1! My Opinion! SELL!
My dear followers ,
XC1! looks like it will make a good move, and here are the details:
The asset is approaching an important pivot point 659'3
Bias - Bearish
Technical Indicators: Pivot Points High anticipates a potential price reversal.
Super trend shows a clear sell, giving a perfect indicators' convergence.
Target - 630'3
About Used Indicators:
For more efficient signals, super-trend is used in combination with other indicators like Pivot Points.
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WISH YOU ALL LUCK
Back to the bottom of the channelPrice is retesting the broken support and now resistance. Wheat and Soyabeans are also turning back down.
CORN - Potential Upward MovementCORN replenishing at demand zone. It will likely bounce back up. Exit at supply zone.
It’s Corn!You know the “It’s Corn” song trending on TikTok? It brings a smile to our face every time we hear it. But if you look at Corn’s price chart and fundamental outlook, that’s a whole other story…
Corn’s recent breakout of a symmetrical triangle towards the downside caught our attention. With the clear break and an ensuing retest, Corn is now trading right on previous support levels. We think this might just be a small reprieve in the downward direction it is headed.
Not only that, when you zoom out to a longer timeframe, Corn has just broken its long-term trend support established since 2020.
This combined with the symmetrical triangle break proves to provide a strong bearish case from here. Classical chart pattern analysis points the take-profit range from the triangle pattern, at roughly 292 points away. From the initial point of breakout, 292 points away takes us back to the 360 level which was the average price seen from 2014 to 2020, back to pre-covid and pre-Russian/Ukraine conflict levels.
Additionally, in a or few previous analyses we emphasized how many of the commodities have started to return to ‘normality’ with prices moving back to pre-war levels. We have already seen Wheat and Soybean retracing most of the War rally as prices tumbled, therefore it’s not hard to see Corn do the same soon.
Other supporting fundamental factors include the falling Ethanol prices and in turn, lower usage of corn for Ethanol, resulting in overall supply to increase.
Fertilizer prices have also fallen from all-time highs, with continued downward momentum. Lower fertilizer cost means better margins for the farmers and potentially higher usage of fertilizers in planting, which may result in better crop yield. Both factors work to lower corn price through more competitive pricing from the farmers and increased supply.
Combined, we think the fundamental and technical chart set-up provides a convincing case for Corn to fall lower. We set our stops above the triangle apex and at the previous level of resistance, 688, and our initial take-profit levels at 565 followed by 455, giving us a risk reward of roughly 1.46 and 3.66 from the current level of 637.6. Each 0.0025 point increment in CME Corn Futures is equal to 12.5 USD.
The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
Disclaimer:
The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description.
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Good Risk/Reward for May2023 Corn LongsTaking a look at K23 Corn futures, a great risk to reward setup has shown itself. Looking back to the beginning of 2023, Corn has retreated to support, and held overnight(~650). Using a tight stop (644), one can surmise that you can risk ~6 to gain ~30, as 680 is previous resistance. Happy Trading!
Corn Futures ( ZC1! ), H4 Potential for Bearish DropTitle: Corn Futures ( ZC1! ), H4 Potential for Bearish Drop
Type: Bearish Drop
Resistance: 688.50
Pivot: 673.00
Support: 648.25
Preferred case: Looking at the H4 chart, my overall bias for ZC1! is bearish due to the current price crossing below the Ichimoku cloud, indicating a bearish market. To add confluence to this bias, price is also within a descending channel. If this bearish momentum continues, expect price to possibly retest the pivot at 673.00 where the overlap resistance and 50% Fibonacci line is before heading towards the support at 648.25, where the previous swing low is.
Alternative scenario: Price may head back up to retest the resistance at 688.50 where the recent high is located.
Fundamentals: There are no major news.
I fit fibs bc I like when it takes the paths of my fibs “tOo MaNy LiNeS” I can’t predict the future but apparently I can predict one of few ranges of lines of support and resistance.
Corn Futures ( ZC1! ), H4 Potential for Bearish DropTitle: Corn Futures ( ZC1! ), H4 Potential for Bearish Drop
Type: Bearish Drop
Resistance: 688.50
Pivot: 673.00
Support: 648.25
Preferred case: Looking at the H4 chart, my overall bias for ZC1! is bearish due to the current price crossing below the Ichimoku cloud , indicating a bearish market. If this bearish momentum continues, expect price to possibly head towards the support at 648.25, where the previous swing low is.
Alternative scenario: Price may head back up to retest the resistance at 688.50 where the recent high is located.
Fundamentals: There are no major news.
Corn Futures ( ZC1! ), H4 Potential for Bearish DropTitle: Corn Futures ( ZC1! ), H4 Potential for Bearish Drop
Type: Bearish Drop
Resistance: 688.50
Pivot: 673.00
Support: 648.25
Preferred case: Looking at the H4 chart, my overall bias for ZC1! is bearish due to the current price crossing below the Ichimoku cloud, indicating a bearish market. If this bearish momentum continues, expect price to possibly head towards the support at 648.25, where the previous swing low is.
Alternative scenario: Price may head back up to retest the resistance at 688.50 where the recent high is located.
Fundamentals: There are no major news.
Corn Futures ( ZC1! ), H4 Potential for Bullish ContinuationTitle: Corn Futures ( ZC1! ), H4 Potential for Bullish Continuation
Type: Bullish Continuation
Resistance: 706.50
Pivot: 6681.00
Support: 673.00
Preferred case: Looking at the H4 chart, my overall bias for ZC1! is bullish due to the current price being above the Ichimoku cloud , indicating a bullish market. If this bullish momentum continues, expect price to possibly head towards the resistance at 706.50, where the previous swing high is.
Alternative scenario: Price may head back down to retest the support at 673.00 where the recent low is located.
Fundamentals: There are no major news.
Corn Futures ( ZC1! ), H4 Potential for Bullish ContinuationTitle: Corn Futures ( ZC1! ), H4 Potential for Bullish Continuation
Type: Bullish Continuation
Resistance: 706.50
Pivot: 6681.00
Support: 673.00
Preferred case: Looking at the H4 chart, my overall bias for ZC1! is bullish due to the current price being above the Ichimoku cloud, indicating a bullish market. If this bullish momentum continues, expect price to possibly head towards the resistance at 706.50, where the previous swing high is.
Alternative scenario: Price may head back down to retest the support at 673.00 where the recent low is located.
Fundamentals: There are no major news.
Corn Futures ( ZC1! ), H4 Potential for Bullish RiseTitle: Corn Futures ( ZC1! ), H4 Potential for Bullish Rise
Type: Bullish Rise
Resistance: 706.50
Pivot: 688.75
Support: 661.25
Preferred case: Looking at the H4 chart, my overall bias for ZC1! is bullish due to the current price being above the Ichimoku cloud , indicating a bullish market. If this bullish momentum continues, expect price to possibly head towards the resistance at 706.50, where the previous swing high is.
Alternative scenario: Price may head back down to retest the support at 661.25 where the 61.8% Fibonacci line and recent low are located.
Fundamentals: There are no major news.
Corn Futures ( ZC1! ), H4 Potential for Bullish RiseTitle: Corn Futures ( ZC1! ), H4 Potential for Bullish Rise
Type: Bullish Rise
Resistance: 706.50
Pivot: 688.75
Support: 661.25
Preferred case: Looking at the H4 chart, my overall bias for ZC1! is bullish due to the current price being above the Ichimoku cloud, indicating a bullish market. If this bullish momentum continues, expect price to possibly head towards the resistance at 706.50, where the previous swing high is.
Alternative scenario: Price may head back down to retest the support at 661.25 where the 61.8% Fibonacci line and recent low are located.
Fundamentals: There are no major news.
Corn prepares for a bullish move🤘As described here - I'm planning to catch the breakout. Let's see if this plays out as I think. In any case - I wish you a good 2023 with lots of good trades. ;)
Corn Futures ( ZC1! ), H4 Potential for Bearish DropTitle: Corn Futures ( ZC1! ), H4 Potential for Bearish Drop
Type: Bearish Drop
Resistance: 671.75
Pivot: 660.00
Support: 636.00
Preferred case: Looking at the H4 chart, my overall bias for ZC1! is bearish due to the current price being below the Ichimoku cloud, indicating a bearish market. If this bearish momentum continues, expect price to possibly continue heading towards the support at 636.00, where the previous swing low is.
Alternative scenario: Price may head back up to retest the pivot at 660.00 where the 50% Fibonacci line is.
Fundamentals: There are no major news.
ZC1! Potential For Bearish ContinuationLooking at the H4 chart, my overall bias for ZC1! is bearish due to the current price being below the Ichimoku cloud, indicating a bearish market. Looking for a sell stop entry at 648.50, to catch the bearish momentum. Stop loss will be placed at 664.00, where the recent high is. Take profit will be at 635.00, where the previous swing low is.
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