March 2, 2010

 

CBOT Corn Outlook on Tuesday: Flat-up 1 cent as planting concern underpins

 

 

Chicago Board of Trade corn futures lack direction heading into Tuesday's open and are expected to open steady to slightly higher.

 

Corn is called steady to 1 cent higher. In overnight trade, March corn was up 1/2 cent to US$3.71 1/4 per bushel and May corn was up 1/4 cent to US$3.82.

 

The market is expected to be firm following losses Monday that erased a chunk of last week's strong gains. Concerns about a excessive moisture in the U.S. Midwest have underpinned prices, as some worry about the large snowpack. Analysts note six-to-10-day forecasts are calling for warmer weather and rain, which could hasten the snow melt and possibly cause flooding.

 

But traders and analysts also note that planting for much of the corn belt is still several weeks away.

 

The market traded within a couple-cent range overnight. Country Hedging said in a morning commentary that "ahead of USDA reports corn is comfortable trading rangebound."

 

Although the market has rebounded well off February lows, Vic Lespinasse, analyst for grainanalyst.com, noted that both corn and wheat have alternated higher and lower closes over the past five days.

 

"To me, that's not much of a trend," Lespinasse said.

 

Traders and analysts noted that the market had a bearish "outside day" on daily technical charts Monday, although a technical analyst said that "no serious chart damage occurred.

 

The next downside price objective for the bears is to push and close May prices below solid technical support at last week's low of US$3.71 1/4 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 a bushel.

 

First resistance for May corn is seen at US$3.85 and then at US$3.87 3/4 and then at US$3.90, the technical analyst said. First support is seen at Monday's low of US$3.80 1/4 and then at US$3.78.