March 26, 2009
CBOT Corn Outlook on Thursday: Higher on export sales, outside support
Chicago Board of Trade corn futures are expected to open higher Thursday following overnight gains amid support from outside markets and strong export sales.
Corn is called 2 to 3 cents higher. In overnight trade, May corn was up 3 1/4 cents to US$3.89 per bushel, July corn was up 2 3/4 cents to US$3.99 and December corn was up 3 cents to US$4.20 1/2.
Consolidation and positioning ahead of Tuesday's key government reports will continue to dominate trade, traders and analysts said. Prices climbed overnight with support from outside markets, including crude oil, analysts said. But analysts said trade could be choppy on Thursday.
"Recently, gains in the overnight session have not meant higher closes during the day," DTN senior analyst Darin Newsom said in a morning commentary. "It will be interesting to see if the same pattern plays out Thursday."
Weekly net export sales exceeded expectations, with 1.291 million metric tonnes for the 2008-09 and 2009-10 marketing years. Analysts had projected sales of 600,000 to 850,000 metric tonnes.
Net sales of 1,191,300 metric tonnes for 2008-09 were up noticeably from the previous week and 72 percent from the prior 4-week average, the USDA said. South Korea was a key buyer, at 481,000 metric tonnes.
"The trade talks about demand totally dying on rallies, but obviously the global consumer stepped up," a floor trader said.
The trader added that despite eroding this week, the corn market held at important support levels Wednesday. The looming U.S. Department of Agriculture planting intentions and quarterly grain stocks reports next week should limit downside movement, traders said. The reports are scheduled to be released at 8:30 a.m. EDT on Tuesday.
Upside potential is limited due to the likelihood of increased farmer selling around US$4, traders add.
The next downside price objective is to push and close 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 this week's high of US$4.03 3/4.
