CBOT Corn Outlook on Thursday: Seen down on follow-through selling

 

 

Chicago Board of Trade corn futures are poised to start 1 to 2 cents per bushel lower Thursday on follow-through selling and pressure from outside markets, traders said.

 

In overnight electronic trading, CBOT March corn fell 1 1/2 cents to US$3.58 1/2.

 

Strength in the U.S. dollar and weakness in crude oil and precious metals are setting a negative tone for the grains, traders said. A firm dollar is often seen as bearish because it makes U.S. grain less attractive to foreign buyers and reduces investors' appetite for risk.

 

"This morning we are looking for a little carry-through selling," said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage. "The influence of the outside markets are a little on the negative side."

 

Corn on Wednesday finished lower on profit taking in the absence of fresh supportive news and amid pressure from a rising dollar. The setback followed a higher close on Tuesday and gains last week.

 

The market is "beginning to the see the momentum indicators turn back to lower" following recent gains, and prices may be ready to retest recent lows, Pfitzenmaier said. Some "natural sellers of corn may be returning to the market" now that Ash Wednesday and Carnival are finished, he said.

 

"If the dollar resumes its uptrend, corn is going to struggle," he said.

 

The next downside price objective for the bears is to push and close CBOT March corn below solid technical support at the February low of US$3.47 1/2, a technical analyst said. Bulls' next upside price objective is to push prices above solid technical resistance at US$3.80, he said.

 

First resistance for March corn is seen at US$3.65 and then at Wednesday's high of US$3.68, the analyst said. First support is seen at Wednesday's low of US$3.59 1/2 and then at US$3.55 3/4, he said.

 

Traders are keeping an eye on the U.S. Department of Agriculture's annual Agricultural Outlook Forum for estimates on plantings. Chief Economist Joseph Glauber said the government expects U.S. farmers to plant 89 million acres of corn and 77 million acres of soybeans in 2010, compared to 86.5 million acres of corn and 77.5 million acres of soybeans planted last year.

 

That was in line with trade estimates for about 89 million to 90 million acres of corn, a trader said. The USDA will issue a more detailed outlook for grain and oilseed crops on Friday.