02/21/25 Afternoon CommStock Report – Bearish Divergence within Bullish Long-term Turnaround

Corn futures made a new high for the move one week ago on Valentine’s Day, then achieved another technical milestone this week with the nearby March contract pushing above $5 for the first time since last summer. So far, the subsequent failure of March corn to hold above $5 and prior lagging of the momentum studies point to a bigger downside correction coming. The “correction” may well remain just that – a temporary pull back in what can ultimately be a secondary trend that is on its way to flipping the primary trend into a bullish one. Here are some technical parameters that will help determine how far down the grains could dip, and where the charts would possibly have them heading on a turn back up.   In the words of RJ O’Brien chart analyst Dave Toth, “the trend remains up until/unless arrested by a bearish divergence in daily momentum…” While there is still comfortable room above what he identifies to be a next level of support for corn at $4.81, waning momentum over the last several sessions does already signal the development of short-term bearish divergence. The basic definition of bearish divergence is that it occurs when prices…