Teucrium Corn, (NYSE: CORN), the exchange traded fund for corn continues to sizzle like the hot summer sun baking the Midwest farm region of the United States. CORN is up 3.37% for the last week of market action. For the month, it has risen by 22.66%. The last quarter of market action has witnessed a 31.83% rise.
The United States produces about 40% of the world’s corn. At present, the corn supply is lower by 1.82 billion bushels to 12.97 billion. This is a 12.3% decline in supply that is supporting an increase in CORN of about three times that amount within the last quarter. That is poised to collapse.
In addition, the technical indicators are showing a weakness in the exchange traded fund. The relative strength index rating is at 71.44, well into overbought territory. The short position has increased substantially. Recently, CORN crossed under its 10-day moving average of $48.79 on a volume of 169K shares. This type of crossover portends lower prices for the future. A similar situation with SOYB ETF which is the soybean exchange traded fund if you want to see another interesting setup.
At $51.27, CORN has just reached a new 52-week high. The trend is definitely the friend of the shareholders as it is trading well above its 20-day (7.47%), 50-day (23.56%) and 200-day (26.48%) moving averages. Volume has been very, very heavy.
The heavy volumes combined with the slowing price surge are indicators of an approaching sell off. Three times in July already there have been sharp price declines for CORN. As the saying goes, “grains take the stairs higher and the escalator lower.”