February 26, 2009

Chicago Board of Trade corn futures are called to open steady to firmer Thursday, based on overnight electronic trading activity and key "outside markets" that are presently in a bullish posture for corn.

The U.S. dollar is weaker against the other major currencies, U.S. stock indexes are firmer and crude oil prices are also firmer.

In overnight trading, May corn finished up 1 1/4 cents at US$3.73 1/2 a bushel.

Gains in corn futures could be limited by early selling pressure in soybeans and wheat, said an analyst, as those futures markets were weaker in overnight dealings.

The weekly USDA export sales report, issued Thursday morning, showed 2008-09 corn sales at 448,900 metric tonnes - down 66% from the previous week's report and down 65% from the four-week average. Traders were expected corn sales to be in the 750,000 to 950,000 range. The latest weekly export sales report is viewed as bearish for corn futures, especially given that recent weekly sales reports have shown much stronger results.

Traders are keeping a keen eye on the USDA Outlook Conference, which begins Thursday and runs through Friday. Traders are expecting USDA to forecast lower planted U.S. corn acres this year versus last year.

Technically, a seven-week-old downtrend remains in place on the daily bar chart for May corn futures. The next downside price objective for the bears is to push and close prices below solid longer-term technical support at US$3.50 a bushel. The bulls' next upside price objective is to push and close prices above solid technical resistance at US$3.90. First resistance for March corn is seen at Wednesday's high of US$3.77 3/4 and then at US$3.80. First support is seen at US$3.68 1/2 and then at US$3.65.