May 18, 2013
July corn futures most recent high was back on March 28th of $7.16 followed by 2 significant market declines in a 2 day period. This created a gap in the futures market between $6.57 and $6.76. By April 24th we had set a low of $6.10 which established the 50% retracement level target at $6.63 which is in the middle between of $6.10 and $7.16. The market managed a rally on April 30th posting a high of $6.69 which completed 2 objectives, reaching the 50% retracement and trading into the gap area. Recently we have been working into a down trend making lower highs which have been $6.67, $6.61, $6.59 3/4 and $6.56. Farmer selling has been slow as many are planting corn and soybeans and corn basis values firming and soybean basis declining. Although grain prices are still very good on old crop for now but be careful not to hold too long because there is a significant drop coming from both corn and soybean.