2008 or the last week of February 2009. The key times for the next high in the grain markets are the weeks of May 20 and June 22, 2009.
commodity price trends
The study of price is the study of trends. Commodity prices are either trending higher, lower, or sideways. The tough part is knowing when the trend changes.
By studying price and looking at historic price charts, you can make projections for how high prices can go and how low prices can go.
The highs that I had projected
last summer were for nearby corn
futures to go to $6.80-$7.00. Prices
went about $1.00 higher, but those
sales sure look good now. The
projection for the soybean market July corn rallied to all-time highs in late June of 2008. From that, high prices fell
was for prices to go up to $13.90 to through support at $6.65 and at $6.04. The next major support levels are at $4.00.
$15.20. With the fund-driven mar-
ket, futures went over $1.00 higher
than my long-term projections, studying price motion With the historic collapse on Wall
but the sales made at those price The study of motion can Street and the massive hedge fund
levels look good at this writing. The involve a huge number of studies. liquidation, prices fell through all of
study of price can also suggest some These are some of the key studies these support levels. We now look
logical prices where the corn and that I have used: moving averages, for a 50% to 62% retracement of the
soybean markets could bottom out. Bollinger bands, percent R, Fibonacci entire down move from the late-June
I’ve drawn in the uptrend lines and retracements, and the relative high to the harvest 2008 low.
downtrend lines on the July corn and strength index. The Fibonacci retracements project
soybean daily charts. The Soybeans The most useful tools that I use a rally in July corn 2009 corn market,
July 2009 Daily chart (on the follow- now are the Elliot Wave, Fibonacci which can take prices back to $5.80-
ing page) shows soybean trending retracements, and relative strength $6.20 price level later this summer.
higher into late June to early July. index. This article will explain the The Soybean July 2009 Weekly
When prices fell below the uptrend Fibonacci price retracements. chart (on the following page) shows
line, futures then collapsed lower The Corn July 2009 Weekly chart a record rally from the $8.30 low to
into a major low in the fall of 2008. (above) shows the dramatic rally the $16.50 high in June of 2008. The
The Corn July 2009 Daily chart form the $3.15 low in September of retracement price levels that were
(on the previous page) shows prices 2006 to the high made in late June of on the charts were at $14.55, $13.35,
rallying higher for several months 2008 at $8.26. From that historic high, $12.37, and $11.40.
along the long-term uptrend line. you can measure some retracement With the huge correction in all
Prices then rallied sharply higher levels that should provide support. the commodity markets, prices fell
staying above the short-term uptrend The initial retracement shows sup- through these support levels into the
line. In early July, futures prices port at $6.31, support was at the 50% harvest low of 2008. How far can the
dropped below the short-term up- retracement level at $5.70 with addi- July 2009 soybean futures rally back?
trend line confirming a major high. tional support at the $5.10 price level. At press time I can make projec-
From that high, prices collapsed tions for a 38% to 50% correction of
lower into the harvest low of 2008. the entire down move, which would
References:
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