March 5, 2009

Chicago Board of Trade corn futures are expected to drop 3 cents to 5 cents Thursday, following an overnight slip and negative equities futures.

In overnight electronic trading, CBOT March corn dropped 6 1/4 cents to US$3.49 a bushel; May corn fell 4 3/4 cents to US$3.58 3/4 and July corn lost 4 1/4 cents to US$3.68 1/2.

"Futures tried to extend yesterday's gains with a little buying early in the overnight session, but the grain market headed lower when stocks turned south," said Bryce Knorr, Farm Futures senior editor, in his morning commentary.

He predicted a lower open Thursday, but noted open interest in corn rose by 13,491 contracts Wednesday, "suggesting new buying and not just profit taking by shorts."

Corn export sales totaled 791,900 metric tonnes for the week ending Feb. 26, according to figures released Thursday by the U.S. Department of Agriculture.

Analysts expected sales in the 350,000-800,000 range.

March corn deliveries totaled 1,703 lots. The house account at Term Commodities was the primary issuer at 1,076 lots. The Man Professional Clearing customer account was primary stopper at 676 lots.

Despite Wednesday's rally, technical indicators still favor the bears, a market technician said, noting a two-month-old downtrend remains in place on the daily bar chart.

The bears are pushing to close May corn below solid longer-term technical support at this week's low of US$3.44 1/2 a bushel, he said, pegging first support at US$3.60 and then at US$3.55.

The bulls are aiming to pierce solid technical resistance at last week's high of US$3.80 1/2, he said, pegging first resistance at Wednesday's high of US$3.65 and then at US$3.70.