Its Spring and Corn is Sprouting

Cornfield

Spring time first brings the daffodils, then the tulips. The trees start to flower and everything looks incredible. So much so that you almost forget about the snow that was there just 3 weeks before. But if you live in Ohio (or most of the mid west) it also means planting time for Corn.

Some after it starts to germinate and emerge. And soon after that farmers are all over what is happening to Corn prices. Corn prices have been moving lower for over 3 years so farmers have hopes for a turn to the upside. The early price action suggests that they may get their wish.

corn

The chart above shows the weekly price of Corn (you can follow the corn ETF $CORN) for the past 3 years. Making a bottom after the 2014 harvest, it has held in a consolidating range since, with a short jump higher in the middle of last summer. After that pop it continued lower in a channel. Until last week.

That is when it broke the channel to the upside. It also crossed over its 100 week SMA, something it had not done since that mid summer jump last year. The Bollinger BandsĀ® are opening higher and momentum is swinging bullish. The RSI is now in the bullish zone and the MACD id crossed up and rising.

This picture supports a move higher. It may or may not happen, but the path of least resistance is for prices to rise, like the stalks as they grow. Moving over a price of 450 would be significant and confirm a reversal higher. A fall back into the channel signals a failed move higher.

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