By IFCMarkets
The US and China are close to reaching a trade deal
The US and China are going to sign a phase one trade deal in early January. Will Corn prices rise?
As part of a trade agreement with the US, China may increase imports of US grains. This primarily concerns US soybeans and wheat, but corn purchases may also increase. Recently, Chinese authorities have stated that some corn plantings in the north-east of the country might suffer from diseases and pests. Now, the main negative factor for corn prices is an excellent, historically high crop forecast in Brazil. Accordingly, the weather deterioration in this country can cause an increase in corn prices.
On the daily timeframe, the Corn: D1 bounced off the support line of the rising channel and is trying to move towards its upper boundary. A number of technical analysis indicators formed buy signals. The further price increase is possible in case of an increase in demand and a reduction in world crop.
The bullish momentum may develop in case Corn exceeds the 200-day moving average line and the upper Bollinger band at 397. This level may serve as an entry point. The initial stop loss may be placed below the Parabolic signal and the lower Bollinger band at 369. After opening the pending order, we shall move the stop to the next fractal low following the Bollinger and Parabolic signals. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place there a stop loss moving it in the direction of the trade. If the price meets the stop level (369) without reaching the order (397), we recommend closing the position: the market sustains internal changes that were not taken into account.
Free Reports:
| Position | Buy |
| Buy stop | Above 397 |
| Stop loss | Below 369 |
Market Analysis provided by IFCMarkets