March 18, 2009

 

CBOT Corn Outlook on Wednesday: Down slightly following overnight losses

 

 

Chicago Board of Trade corn futures are expected to open slightly lower Wednesday following overnight losses, with the market looking to other markets for direction, traders said.

 

Corn is called steady to two cents lower. In overnight trading, May corn was down 1 cent to US$3.89 1/2 per bushel and July corn was down 1/2 cent to US$4.00 1/4.

 

The market traded within a two-cent range overnight following a day of consolidation Tuesday, traders said, and there's little news to move the market Wednesday.

 

Outside markets are mixed. Crude oil and equities are lower, but so is the U.S. dollar, which is supportive. The market will be influenced by those markets and by soy and wheat, traders said.

 

Grains traders are eying the situation in Argentina, where farmers are at odds with the government over export tax proposals for soybeans. Vic Lespinasse, analyst for grainanalyst.com, said that for the first time in a long time, he's seen no mention of additional talks scheduled between farmers and the government.

 

"To me that's ominous," Lespinasse said. Problems in Argentina are seen most supportive to soybeans, traders said, although gains in soy could spill over into corn because of the two crops' competition for acres. Planted acreage estimates have been mostly supportive, traders said, although Lespinasse added that he thinks widely cited projections from Informa Economics issued last week are too low for corn.

 

Traders said the market still looks strong technically after climbing above major moving averages in recent days.

 

In export news, analysts said South Korea has purchased 110,000 metric tonnes of corn.

 

The next downside price objective is to push and close May prices below solid technical support at US$3.70 a bushel, a technical analyst said. The next upside price objective is to push and close prices above solid technical resistance at US$4.25.

 

First resistance for May corn is seen at Tuesday's high of US$3.95 1/4 and then at this week's high of US$3.97 1/2, the technical analyst said. First support is seen at Tuesday's low of US$3.88 and then at this week's low of US$3.81 1/2.