The December Corn Impulse wave was cancelled out because the selloff of wave 2 went down to test the low of wave 1 during yesterday's trading session. Now, the price action in corn becomes a continuation of the big correction that began last summer, instead of an impulse rally - it becomes an extended A-B-C-D-E correction.
The price action also marks a double bottom pattern from the May 18th low, with D & E becoming the double bottom points. The support in the 500-490 area is fairly long term, so it should hold again for another up impulse to begin.
I was talking with Lance on this matter, and we both agreed that because of the season (corn hasn't even pollinated yet), December corn price is more likely to mark up higher than leak lower from here.
If it was August 4th currently, we might be talking more about selling because the trade would/will have a better idea of the crop size. Also of note, was Monday's bar - it was quite Doji-like (open/close very close to the same). Therefore, we have more evidence that a new rally has the best odds. Check out the updated December daily corn chart - see the labeled correction points.
The first up impulse wave (Big1) in August soybeans was 254 cents. Next, came the Big 2 correction down and then big3 up began just before the report last Friday. By the rules of Elliot wave, #3 up should be longer than #1.
By using some of the Fibonacci ratios, we can look at a possibility into how far the #3 wave will rally. I'm thinking it will be no shorter that 1.5 X 254. There are different schools of thought as to where you begin counting the leg length.
Traditionally, you start at the bottom of 2, but I have heard of some analysts starting the counting at the top of 1. For instance, 1.62 X 254 = 411. The bottom of 2 is 1351, so 411 + 1351 = 1762 as a possibility.
Alternately, the top or terminus of #1 is 1447. 411 + 1447 = 1858.
There is also another way to estimate price targets for August soybeans that is related to the length of the range from high to the recent low of 1193.25 - measuring high to low, kind of like a double bottom (W) or a head & shoulders.
You will see that calculation on the chart - upper left. Here is Monday's August soybean 8 hour chart.
September wheat leaked about 5 cents down from last Friday's close. The number 2 corrective leg has now retraced about 62% of the number 1 up impulse. As I have stated, the first correction in an uptrend can be very deep, so will 640 hold? Don't know.
There is strong support 20 cents down at 620 - I don't believe wheat will retrace the entirety of the up move. Here is the updated September wheat chart.
Happy Independence DAY!
Hello,
What is your thoughts on the significance of the gap in the December daily corn chart made last May of 2022 at around $6.70? Do you think the market will try to fill it?
Also, I would enjoy more info on the cattle markets as well. Thanks!
Which class of wheat should SRW producers follow in the weekly recommendations? Seems that is left out.
How about a cattle market update? Been a minute for them. Thanks!