Is December 2021 Corn Poised for a Breakout?

Since the May 7th high at $6.38/bu., CME Group December 2021 Corn futures have been trading in a sideways albeit large trading range with the $6.10-$6.38 area as resistance and $5.00-$5.15 area as support (See Figure 1 below).

Recent ADX readings below 20 are confirming this market’s intermediate-term trendless action. Although classical technical analysis favors breakouts from sideways markets in the direction of the prior, longer-term trend (bullish in this instance), we tend to be agnostic regarding low volatility breakouts and favor bracketing December 2021 Corn with buy stops above $6.25 and sell stops below $5.00.

Obviously fundamental factors such as weather, demand (both domestic and global) and macroeconomics (such as the impact of the delta variant) will ultimately determine why the breakout from sideways happens, nevertheless our contention is that given our current sideways action, playing technical breakouts in new crop corn is a high probability, low risk and potentially high reward proposition.