Grain futures bucked the trend of the broader commodities sector to close well off their session lows. Thursday's volatility and higher close comes ahead of Friday's monthly USDA crop report, which may prove supportive of the late-day rally. Corn futures appeared to be the strongest performer, breaking out from a longstanding Falling Wedge chart pattern identified by Autochartist.
Corn has been plumbing the depths of recent contract lows around the key support level of $5.75 per bushel with minimal buying interest. Thursday's move above the Falling Wedge resistance sets the stage for a possible recovery in the near term. The pattern scores a Quality ranking of 5 bars, with 5 bars of momentum underlying the breakout signal.
The projected price target for the nearby futures suggests a minimum of $6.04 per bushel, which would be a meaningful retracement away from the current lows. A sharp increase in upside momentum could be generated by Friday's report and propel the market to the upper end of the forecast near $6.30 per bushel. If such a move occurs, it may signal a long term low is in at the bottom of this Falling Wedge chart pattern.
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