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.
Weekend rains prevent bigger slide in corn health
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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