March 18, 2010

 

CBOT Corn Outlook on Thursday: Down 4-6 cents in correction; dollar weighs

 

 

Chicago Board of Trade corn futures are expected to open lower Thursday following overnight losses as a firm dollar weighs on prices.

 

Corn is called 4 to 6 cents lower. In overnight trading, May corn was down 4 3/4 cents to US$3.69 1/4 per bushel and July corn was down 5 cents to US$3.80 1/4.

 

The market has rebounded recently amid technical support, but corrected overnight thanks largely to a stronger dollar, which was higher due to concerns about the euro. The dollar is likely to keep corn and other commodities under pressure Thursday, analysts said.

 

Fundamentally the market does not have much news to digest, as many traders are already looking ahead to the March 31 planting intentions report from the government. Analysts say that a private analytical firm is expected to release its own estimates ahead of the report on Friday morning.

 

Traders are watching the weather in the Midwest, with a somewhat improved forecast for the Upper Midwest giving the region a break from the excessive moisture and flooding that could stall the start of planting.

 

Still, a trader said, "We're far from being out of the woods."

 

Others say that it is still too soon to worry about planting.

 

Export sales were stronger than expected Thursday. The U.S. Department of Agriculture reported net sales of 747,600 metric tonnes for the week ended March 11, up from the prior week's total of 338,900 metric tonnes. Analysts had expected between 350,000 and 700,000 metric tonnes.

 

Bears still have the slight overall near-term technical advantage, technical analyst Jim Wyckoff said, but "good follow-through buying on Thursday would begin to suggest that a market low is in place in corn."

 

The next downside price objective for the bears is to push and close prices below solid technical support at the February low of US$3.59, Wyckoff said. The bulls' next upside price objective is to push and close prices above solid technical resistance at the March high of US$3.92 a bushel.

 

First resistance for May corn is seen at Wednesday's high of US$3.74 1/2 and then at US$3.80, Wyckoff said. First support is seen at US$3.70 and then at Wednesday's low of US$3.65.