February 27, 2009

 

CBOT Corn Review on Thursday: Late pressure on acreage talk, weak exports

 

 

Grain futures prices at the Chicago Board of Trade closed modestly lower and nearer the session low Thursday, amid ideas of higher-than-expected planted U.S. corn acres this spring and following a weak USDA export sales report.

 

May corn futures closed down 2 cents at US$3.70 1/4.

 

The key outside markets were supportive for corn futures in early trading, said Victor Lespinasse, veteran market watcher with GrainAnalyst.com. Crude oil prices were sharply higher, the U.S. dollar weaker and the U.S. stock market steady to firmer.

 

Ideas that U.S. corn planted acres will not be reduced as much as thought a few weeks ago, however, were a bearish fundamental in the market Thursday, he said.

 

USDA Chief Economist Joe Glauber said corn acreage in 2009 is expected to be about steady with last year, at 86 million acres, while soybeans will increase more than 1 million acres. Traders are keeping a keen eye on the USDA Outlook Forum, which ends Friday.

 

USDA also projected ethanol usage up 14% over last year, which corn traders said was a minor bullish factor supporting prices early, said Lespinasse.

 

A bearish weekly USDA export sales report showing corn sales about half of what they had been in recent weeks also worked during the session to depress corn futures, he said. 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 expected corn sales to be in the 750,000- to 950,000-tonne range.

 

"We're not too surprised to see choppy trade develop due to a variety of fundamental factors the market is digesting," said the editors at the Pro Farmer advisory service, in their midday report.

 

Friday is first-notice day for delivery intentions of March corn futures contracts.

 

Technically, a seven-week 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 US$3.75 and then at Thursday's high of US$3.80 1/2. First support is seen at Thursday's low of US$3.65 3/4 and then at US$3.60.