SINGAPORE: CBOT corn may break a support at $7.34-1/2 per bushel and fall towards $6.52 in the third quarter, as it faces a strong resistance zone of $8.37 to $8.43-3/4.
The zone is formed by the 76.4% projection level of an upward wave C from $3.01 and the August 2012 high of $8.43-3/4.
This is the third wave of a giant three-wave cycle from the 1,987 low of $1.42.
It is expected to either end around $7.34-1/2 or extend to its 100% projection level of $10.02-3/4.
Given that this wave has travelled far above $7.34-1/2, it is unlikely to stop around this level. Based on the depth of a wave 4, the wave C may eventually unfold to $10.02-3/4.
However, the extension of this wave may not occur until the anticipated correction completes. The first black monthly candlestick in May marked an end of the rise from December 2021.
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A rising trendline points at a correction target of $6.52, which will be available when corn breaks $7.34-1/2. The correction may also adopt a flat mode, mainly confined within the range of $7.34-1/2 to $8.37.
On the daily chart, a five-wave cycle from $4.87-3/4 seems to have completed, as suggested by its structure and the drop from $8.27, which is deeper than any one since September 10, 2021.
Three waves may make up the drop. The current wave c is expected to unfold into $6.57-1/2 to $6.97-1/2 range.
A break above $8.03-1/4 could signal the continuation of the uptrend.
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