Corn: the trader's view
Corn's bear market looks incomplete. Having collapsed from highs of 796 in 2008, it has rallied choppily, which is classic correction-against-the-trend behaviour. The wave principle suggests another powerful burst of selling should occur, with a major target at 280. To accomplish this, it will first have to smash down through 306, a level that has provided a floor on two recent occasions. An even deeper sell-off would target 198.
The outlook would brighten considerably if corn could end a month above its 20-month moving average, which sits at 436 today.
Wheat: the trader's view
The main trend in wheat is decidedly downwards for now. The crop's declines since its early 2008 highs have been strong and thrusting, while its rallies have been choppy and unconvincing. If the key 444 level gives way, then wheat is liable to drop towards 420, 404 and then 371. And should the second phase of its bear market equal the first, it would fall to around 235.
To signal a reversal into a bull market from the current levels, a strong move above the 21-month exponential moving average would be very helpful. Notice how this indicator – the red line – has acted as a floor and a ceiling to the wheat price over recent years.
Soya: the trader's view
Soya is hardly full of beans at the moment. The commodity is in sideways mode following its big 2008 sell-off. Although it has registered some sharp gains since its lows just over a year ago, the wave structure suggests a market that is correcting a fall, rather than embarking upon a new bull market. Therefore, the natural expectation is for a break to the downside, with a move below 870 opening up the next targets at 780, then 613.
A decisive surge up through the 21-month exponential average and the descending trend line would undermine this view, however.
Cocoa: the trader's view
The rally in cocoa since its last major bottom in 2000 has been an impressive affair, to be sure. But it's still a splash in a teacup compared with the two cocoa super-cycles of the 20th century. Those booms saw the commodity surge 1,748 and 2,070 per cent over periods of 21 and 12 years, respectively. Today, cocoa has risen by a 'mere' 303 per cent over nine years.
If it can close decisively above £2,353 a tonne, there are few historical barriers between there and its all-time high of £3,512 from back in 1977. Interestingly, that record high ties in with a key Elliott Wave target. Momentum hasn't yet reached the sort of overbought extremes that usually accompany a major top, which also gives cocoa scope to go higher still.
Key targets: £2,353, £2,499, £2,726, £3,512.
Orange juice: the trader's view
Orange juice's (OJ) upward spray from its lows of last year is still in progress. The Elliott wave count suggests that the move could eventually match or exceed the peak reached in the explosive 2004-07 move. Long-term momentum isn't yet at the stretched levels that we'd typically see at a big top, which leaves room for more upwards progress here.
Still, OJ has reached a zone where it could feel the squeeze. The monthly Ichimoku cloud – currently between 131.8 and 156.5 – coincides with Fibonacci derived levels at 154-160. A move above here opens up 184 and then 204-219. By contrast, a sustained drop through the 21-week moving average and the rising trend-line could spell trouble ahead for the juice.
