CBOT Corn Outlook on Tuesday: Dn 2 - 4 cents; overnight theme, weather eyed

 

 

In overnight trading, March corn was down 4 cents to US$3.89 3/4 per bushel, May corn was down 3 3/4 cents to US$4.01 and July corn was down 3 3/4 cents to US$4.11 1/2.

 

Weather in Argentina, which is suffering a severe drought, remains the key focus of the market, analysts said. Traders and analysts noted that the heat there has abated somewhat, but DTN Meteorlogix still calls for mostly dry conditions through Friday, with some light showers possible Saturday.

 

The worries about the crop have prompted speculation that a drop in exports from Argentina will provide an opportunity for more U.S. business. But Farm Futures senior editor Bryce Knorr said U.S. exports will likely not get much of a boost.

 

"Feed wheat remains plentiful on world markets, and many end users care more about price than quality right now," Knorr said.

 

The market has been range-bound recently, trading between US$4.02 and US$3.73 during the past six days. Traders and analysts said there is little sentiment to run prices above US$4, as the demand picture remains bleak due to the global recession. Buyers are cautious as the seasonal "February Break" may be looming around the corner, a technical analyst said.

 

The next downside price objective is to push and close prices below solid technical support at the January low of US$3.58 3/4 a bushel, the technical analyst said. The next upside price objective is to push and close prices above major psychological resistance at US$4.00.

 

First resistance for March corn is seen at US$4.00 and then at Monday's high of US$4.02 1/2, the technical analyst said. First support is seen at Monday's low of US$3.83 3/4 and then at last week's low of US$3.76 1/4.

 

The March contract is below its 20-day moving average of US$3.95 1/4 but above its 50-day average at US$3.80.