March 12, 2009

Chicago Board of Trade corn futures are expected to open higher Thursday following modest overnight gains and strong export sales.

 

Corn is called 2 to 4 cents higher. In overnight trade, March corn was up 1/4 cent to US$3.56 1/4, May corn was up 2 1/4 cents to US$3.66 3/4 and July corn was up 1/4 cent to 3.74.

 

Weekly net export sales of 1.092 million metric tonnes reported Thursday morning were up 38% from the previous week and 6% from the prior four-week average, the U.S. Department of Agriculture said. Trade estimates had been for sales between 400,000 and 800,000 metric tonnes.

 

The export sales figures should support the market in early trade, analysts said. But technically the market is weak, they said, following Wednesday's losses, which wiped out most of the market's gains Monday and Tuesday.

 

Marty Foreman, analyst for Doane Advisory Services, noted Wednesday's slide followed a USDA supply and demand report that "leaned on the positive side," and that the market stalled amid a lack of follow-through buying.

 

"Yesterday's performance was a little discouraging," Foreman said.

 

Analysts said there is little news in the market. With the supply and demand report out of the way, the market awaits a March 31 planting intentions report. Analysts say there will be an increasing focus on U.S. corn belt weather forecasts. Some analysts say there are already concerns about recent soaking rains, although others say it's much too soon to worry.

 

Outside markets are mixed, traders and analysts said. Foreman said corn should open higher but noted the market could be influenced by movement in equities.

 

"It just seems like if (the stock market) is not performing, it just drags everything else down," Foreman said.

 

The next downside price objective is to push and close May prices below solid technical support at last week's low of US$3.44 1/2 a bushel, a technical analyst said. The next upside price objective is to push and close prices above solid technical resistance at this week's high of US$3.84.

 

First resistance for May corn is seen at US$3.70 and then at US$3.75, the technical analyst said. First support is seen at Wednesday's low of US$3.62 and then at this week's low of US$3.57.

 

In other news, there were 609 deliveries reported against the March contract.