Corn May Be Near A Bottom

Corn futures in the U.S. have been weak for a good part of this summer, in large part because of concerns of oversupply. In fact, in July prices fell another 6.6%. And this was despite buying by China, where corn prices have soared on a shortage of supply caused by speculators hoarding corn.

At Excalibur Pro, we look at financial instruments through a number of different lenses. Two of them seem to be indicating that a turnaround for corn prices is nearing. We look at one-month rolling volatility - and on July 22 that stood at a fairly high level of 1.829. But it has since dropped to 1.292 on July 31. High volatility usually implies weakness in price. The fact that volatility is declining likely means that corn is leaning toward stable or even higher prices.

The RSI for corn is around 36 - not far off the 30 level that indicates a financial instrument is oversold. That said, the price remains under its major moving averages and Markov continues to send bearish signals. But keep an eye on these potential early signals.