The open interest has increased 304,592 contracts between January 7th and January 23rd in the corn - all contract months - that's 12 trading days. This is quite a bit of interest in the corn market. The new players are fund longs and commercial long & shorts. The commercials added many more than the funds did - physical is moving en masse.
The nearterm March Corn target is 516 or 524-526, where old gaps exists on the continuation chart. Then, it should consolidate for a couple of weeks, before the next leg higher.
The rule of sideways and vertical time is consistent in all financial charts. Because corn traded in a sideways range between 2014-2020, the rule says that the next motion (breaking out higher, correcting lower) should last about 6 years in duration. We are a bit past 4 years into the trending higher and lower motion. Therefore, corn should have about 1.5-2 more years of this quality.
This opens the possibility for corn trading back to the 2022 highs or more. In other words, 825 or more is higher probability within the next year or 2 than price stopping at 550 or 600 and coming back down to 400 or below. It could also rally to 600 or 650 and go sideways/consolidate between 600 and 650 for months not years. The time rule through 2026 was cast in 2020 when the corn rally started. It has been a while, but I have stated this before.
Another way to look at it is that since 2020, the playing field fundamentally changed from sideways lethargic action to more dynamic trending action. This trending dynamic action should control the corn market for a least another 1.5 years, if not longer. It's like playing catch - the motion remains the same until another force (equally as strong) stops or reverses the motion - the other person catching the ball - not before they catch it.
support - 484.50, 480.00
resistance - 494.00, 516.00, 525.00
The same 6year-6year rule applies to the soybean market. A few days before Christmas, beans marked a emphatic V bottom (straight down-straight up). The up motion of the first leg was 9 trading days in duration, printing a higher high than the price to the left (this was a bullish clue.) Therefore, it is more likely to remain in the uptrend than reverse. Charts follow rules with their impulsive and corrective waves. The high of the last leg up functions as support in the future. The top of 1 on the below chart became support for the correction (4).
You'll see on the bean chart. I've labeled the counting the best I can. Basically, Elliot says that the motion follows waves up and down. In an uptrend it's 1-2-3-4-5 up, and abc or abcde for the correction. Additionally, smaller waves construct the larger ones. March beans has so far carved out an 1upleg, 2correction, 3upleg, 4correction (1-2-3-4). We have so far a 1-2-3-4 and a probable 5 up occurring currently.
Is it possible that the daily and weekly downtrend is still in force, where the 1-2-3 motion is actually an A-B-C up correction in a down trending market? Yes, anything is possible. However, January 22-23rd marked a higher high after the number 4 correction - if the up trend were a correction in a downtrend, the market likely would not have bounced to a new high after point 4 (see chart below).
Most of us agree that corn is going to continue to trend higher from here. The chart low in soybeans was more emphatic than the corn low. I'm not sure the bean market would trend lower while corn's trending higher, for a meaningful period. Also, the same 6 year rule applies to beans, as well.
support - 1047.50, 1035.50 - less likely
resistance - 1076.50 - breakout, 1100.00, 1130.00-1150.00
Here is a look at the March Bean daily:
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