- Corn ↓ 9% since start of 2024
- Bearish on H1 but RSI near oversold
- Technical levels – 432.00 and 423.40
- Possible breakout on horizon?
Markets remain edgy ahead of a week packed with high-risk events that could spark fresh volatility!
Ahead of the main events, FXTM’s new Corn commodity caught our attention after lingering near 3-month lows.
Prices are under pressure on the daily charts, trading around 427 as of writing.
Note: Corn is priced per bushel. One bushel is equivalent to 60 pounds.
But before we take a deep dive into the world of Corn, here are the basics:
What is Corn?
Corn is one of the most widely grown food plants in the world.
It can be used as livestock feed, biofuel, and domestic products.
What does FXTM’s Corn track
FXTM’s Corn tracks the CME Group Corn No. 2 Yellow futures, the most liquid and active markets in grain.
Some fun facts:
- Ancient crop originating from Mexico
- It comes in many different colours
- The United States is the largest producer
- China is the biggest importer
- ↓ almost 9% year-to-date
The lowdown…
Corn prices have dropped 3.5% this month, bringing its year-to-date losses to almost 9%.
A key force pressuring the soft commodity was growing concern about a supply gut. The bumper harvests back in 2023 fueled fears around global corn stocks increasing to the highest in six years.
Although corn prices have attempted to rebound amid weather-related issues, the path of least resistance points south.
The bigger picture
An abundance of supply may cap upside gains for corn prices.
According to the USDA, the world supply of corn is expected to hit 312 million metric tonnes for the 2023/2024 marketing year. This represents a 3.7% increase from the previous year with inventories projected to hit a six-year peak by September 2025.
Still, demand is also expected to pick up thanks to biofuel usage, animal feed, and a projected jump in exports.
Technical Outlook
Corn is under pressure on the H1 charts with prices trading below the 50, 100, and 200 SMA.
Although the soft commodity is respecting a bearish channel, the Relative Strength Index (RSI) is heading toward 30 – signalling that prices may be oversold.
- Sustained weakness below 432.00 may open a path towards 423.40 and 420.00.
- Should prices push back above 432.00, this could trigger an incline toward 436.00.
