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Pandemic or Wave Patterns: Only One Caused Corn's HUGE Comeback

Last April, the global pandemic was predicted to send corn prices in one direction: down. Where they went instead shocked an entire industry – learned why corn rose instead.

by Nico Isaac
Updated: April 06, 2021

It's official: The global commodities complex is feeling very... corny! Last check, by March end, the grain king had officially reclaimed its crown after touching its highest level since 2013.

But according to some sources, corn's comeback was not on the mainstream agenda. Here, this March 8 industry report explains how the pandemic was slated to be a source of significant pain for grains in general, and corn most specifically:

"The grain markets have been on a bull run for the last several months, with futures prices hitting multiyear highs. Corn in early February 2021 hit a seven-year high.

"The move took many in the industry by surprise, given that grain prices in the spring of 2020 had hit new contract and multiyear lows at the height of the COVID-19 pandemic.

"As the pandemic began the spring of 2020, the demand picture had looked dismal."

How dismal, you might ask?

Well, if you rewind the clock to early days pandemic in April 2020, roughly half of the US ethanal plants were shuddered as the "nation went into lockdown and gas demand came to a screeching halt." Corn is widely used in the processing of ethanol.

Then, on the agricultural front, US farmers were literally slaughtering their livestock supply and opting out of putting corn seeds in the ground amidst the shutdown of the nation's food service industry. Meanwhile corn futures were circling the drain of 4-year lows.

Here, these news headlines from early 2020 paint a very forlorn corn picture:

  • "Coronavirus Sends Crop and Livestock Prices into a Tailspin' (April 7 fb.org)
  • "Markets for Corn Evaporate Over Coronavirus Pandemic" (April 29 UPI)
  • "US Farmers Flee Corn as Coronavirus Kills Prices (August 10 aljazeera.com)

Now you can see why many in the industry were taken by surprise by what corn price did instead -- namely, come roaring back to life despite the pandemic.

Luckily, not everyone was unprepared for corn's comeback.

Here, we look back on our April 2020 Monthly Commodity Junctures, in which EWI's chief commodities analyst Jeffery Kennedy showed the following chart of corn prices, labeled with a very bullish Elliott wave forecast. Here, Jeffrey wrote:

"Ideally if everything goes according to plan that low should be in place some time in June or July at the latest and then at that point I will be looking for an advance that should push prices back to beyond the extreme of the prior fourth wave of one lesser degree , coming into play at 522 and 3/4's."

april2020mcjcorn

And, the next chart captures the incredible comeback that took corn prices to 8-year highs in March 2021.

32621corn

If you're wondering if all Elliott wave forecasts hit the bullseye like this one, the honest answer is, absolutely... not!

Elliott wave analysis is not about perfection. Rather, using objective analysis, it aims to identify the most probable outcome for price action using a handful of tried-and-true technical tools.

The end result is our Commodity Junctures Service.

Grains, Trains, and Opportunities Galore

Commodity investors lured by the "iron-clad" logic of "fundamentals" got crushed. The shock of last year's lesson may linger for a while. Alternatives? Consider our Commodity Junctures Service, a premier resource for in-depth analysis of softs, foods, livestock, grains, and more.

PLUS: Editor Jeffrey Kennedy just released a newly updated 2021 Commodity Outlook, which gives you Elliott wave-labeled price charts and forecasts for corn, sugar, cotton, soybeans, live cattle and more for all of 2021.

See below to experience an instant change in the way you see commodities.

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