Technical Monday: Corn Futures and ETF Worth Watching

January 6, 2025

Mish's Daily

By Mish Schneider

In the Outlook 2025 CORN, the ETF, is an honorable mention pick for this year.

I use a monthly chart in the report as a longer-term viewpoint. For CORN to regain a 6-7-year business cycle expansion or go through the 80-month moving average, the price to clear is $20.00.

The price of corn futures is influenced by a combination of supply, demand, and external factors.

There are 4 major supply factors to consider:

Weather
Acreage Planted & Yields
Global Production
Pests/Diseases

Corn futures were under heavy pressure last Friday but are bouncing back to start the week due to dryness in parts of South America coupled with broad strength in commodities.

The major demand factors are:

Ethanol Production
Livestock Feed
Exports
Industrial Use

Talk of potential softer tariffs and higher natural gas and oil prices are potentially giving corn support.

Economic & Policy Factors

Exchange Rates
Government Policies
Interest Rates

The US dollar relaxed a bit while interest rates remained high.

Market & Seasonal Factors

Speculation
Seasonality
Stock-to-Use Ratios

Seasonality is in corn’s favor. Marketing year (MY) to date shipments are now 24.49% above the same period in the 2023/24 MY.

External Factors

Global Conflicts
Transport Costs

Currently, oil prices could remain a factor, as well as any dockworkers strike and the continuing volatile geopolitical situation.

Technicals

The chart above is a daily viewpoint.

On the Daily chart, CORN is in an accumulation phase although needs to confirm with another close above the 200-DMA.

CORN outperforms SPY. And the momentum indicator tells us that the bullish divergence continues while momentum improves.

18.85 is a good start as an area to clear.

The futures chart shows support at 445 near-term.

Should Corn futures clear recent highs around 460, it is possible to see a substantial rally in 2025.

The bigger question is though, if Corn and other grains rally in 2025, what are the implications for

Inflation
Tariffs and policies
Geopolitics
Impact of weather
Strain on the consumer

Educational purposes only, not official trading advice.

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