January 25, 2010
CBOT Corn Outlook on Monday: Up 1-2 cents; oversold, but upside limited
Chicago Board of Trade corn futures are poised to open slightly higher Monday following overnight gains as the market is seen as oversold.
Corn is called 1 cent to 2 cents higher. In overnight trade, March corn was up 1 1/4 cents to US$3.66 per bushel and May corn was up 1 1/4 cents to US$3.76 3/4.
After falling last week amid pressure from outside markets such as equities and crude oil, the corn market is getting little outside direction Monday, analysts said.
Although prices are seen as oversold, there is little bullish sentiment in the market, traders said, given the government's recent estimate of a record crop in 2009, coupled with expectations that U.S. producers will plant at least an additional 3 million acres of corn in 2010.
The market has tumbled from around the US$4.25 area in the March contract since the U.S. Department of Agriculture released its bearish crop report Jan. 12.
"We're searching for a bottom here," a trader said. "But there's no catalyst to the up side."
The market declined Friday despite extremely strong export sales that Midwest Market Solutions said were a two-year high. Those sales confirmed speculation that the recent break in prices stimulated demand.
Traders said that the market's direction could be swayed by any significant moves in outside macro markets.
The market closed Friday at a fresh 3.5-month low, a technical analyst said.
The next downside price objective for the bears is to push and close March prices below solid technical support at US$3.50 a bushel, a technical analyst said. Bulls' next upside price objective is to push prices above solid technical resistance at US$3.92 1/2 a bushel, which is the top of the recent downside price gap on the daily bar chart.
First resistance for March corn is seen at US$3.70 and then at Friday's high of US$3.72 3/4, the technical analyst said. First support is seen at last week's low of US$3.62 1/4 and then at US$3.60.
