Grain markets are rebounding sharply from last week's sell-off, indicating the weakness seen across the complex may have been a temporary pullback. Corn futures are leading the way higher in the latest price recovery, and have now established a convincing breakout from the Rising Wedge chart pattern shown here on the 30-minute timeframe.
This Rising Wedge appears to be a reversal pattern, having made a sideways consolidation zone in volatile trading just after the initial sell-off in the market from the highs for the year. The market has now pierced the upper resistance and is now poised to retest the previous highs. If successful, Corn futures would then be poised to challenge the all-time highs set in 2008 near $8.00 per bushel.
The initial breakout from the Rising Wedge projects the price can test the $7.32 - $7.39 per bushel range in the near term to complete the reversal pattern. Because this market has been in a sustained uptrend and is positioned near the all-time highs however, it is highly possible that increased momentum to the upside could overshoot this forecast. It would take a close below $7.20 per bushel to negate the overall bullish set-up from this pattern.
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