In two days, Corn prices dropped 85 cents, or 11.6% of its value. Is the drop the end of the end or the beginning of the end or the middle of the end?
I have traded Corn since 1975 — initially at the Chicago Board of Trade for a division of Continental Grain Company, and then as a private speculator. I trade markets primarily based on classical chart patterns, volume and open interest, and an appraisal of the conventional wisdom of market participants.Based on my experience trading Corn, I believe the huge price decline of the past two days represents the middle of a major correction in Corn prices — that this decline should bring prices to $5.10 per bushel (nearby contract) from Monday’s close of $6.43.
Of course, farmers reading this post will object to this prediction, and claim that such a price decline is against the laws of nature and common sense. Yet, ever since I started trading Corn I have observed that farmers represent a population group that get very rich from land prices, all the while complaining about crop prices. (more)
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