March 27, 2009

 

CBOT Corn Outlook on Friday: Down 1-2 cents, consolidation continues

 

 

Chicago Board of Trade corn futures are expected to open slightly lower Friday following overnight losses, with more cautious trade anticipated ahead of next week's key government reports.

 

Corn is called 1 to 2 cents lower. In overnight trade, May corn was down 1 3/4 cents to US$3.89 per bushel, July corn was down 2 cents to US$3.99 1/4 and December corn was down 1 3/4 cents to US$4.21.

 

Weaker crude oil and a stronger dollar should pressure the market early, traders said. The trade is awaiting next week's planting intentions and quarterly grains stocks reports, which will be released Tuesday at 8:30 a.m. EDT.

 

Until then, price movement will be limited as traders shy away from new positions, analysts said.

 

"Volume was horrible overnight," a trader said. "Very consolidative-type trade."

 

The report is expected to be friendly to corn. Most analysts are expecting the USDA to show a drop in planted acres in the report, although estimates vary widely.

 

The market got a boost Thursday from stronger-than-expected weekly net export sales, and got more supportive news Friday. The U.S. Department of Agriculture on Friday announced private export sales of 110,000 metric tonnes of corn for delivery to South Korea in the 2008-09 marketing year.

 

A trader said that recent weakness in the dollar has helped spur sales in Asia.

 

Also, Philippine feedmillers have imported around 800,000 metric tonnes of feed wheat and 300,000 metric tonnes of corn so far this year, people in the industry said Friday.

 

U.S. corn belt weather will become a key focus following next week's report, analysts say. Some are already talking about problems with early planting.

 

"It's a wet trend, so the trade will monitor that today," a trader said.

 

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 this week's high of US$4.03 3/4.

 

First resistance for May corn is seen at US$3.95 and then at US$4.00, the technical analyst said. First support is seen at Thursday's low of US$3.86 and then at this week's low of US$3.84.