April 2, 2009

 

CBOT Corn Outlook on Thursday: Higher on exports, crude, equities

 

 

Chicago Board of Trade corn futures are expected to open higher Thursday on strong outside markets and good weekly export sales, traders said.

 

Corn is called 6 to 8 cents higher. In overnight trade, May corn was up 7 cents to US$4.03 per bushel and July corn was up 6 1/2 cents to US$4.12 3/4.

 

The strong export sales, coupled with sharply higher crude oil and equities, should give corn strength early, analysts said. The U.S. Department of Agriculture reported net weekly export sales Thursday morning of 1.259 million metric tonnes. Sales for the 2008-09 marketing year were up 5% from the previous week and 42% from the prior four-week average, the USDA said.

 

Terry Reilly, analyst for Citigroup, said soybeans, which got a boost from a bullish USDA report Tuesday, should lead the way higher at the open, but corn's strong export sales could help it gain on beans during the day.

 

The May contract continues to test the US$4 area. Although it has climbed above US$4 occasionally during the past month, it has been unable to close above it, as farmer selling becomes a factor.

 

Reilly said that a close above US$4 for a couple days would give the market momentum to move higher even with the farmer selling.

 

"I would own corn at that point and expect it to move up to about US$4.25," Reilly said. "The fundamentals are there for corn to move to the upside."

 

But continued failure to close above US$4 could prompt the market to slide, some analysts say.

 

Weather is becoming a more important daily factor in the market, traders said. Wet U.S. corn-belt weather is mainly seen as supportive, because it could prompt planting delays. A trader said farmers are starting to get "antsy."

 

Mark Gold, managing partner of Top Third Ag Marketing, noted the wet weather but also added that he is "hearing western Iowa is ready to move, which is 30 days earlier than a year ago."

 

In other export news, private exporters reported to the U.S. Department of Agriculture export sales of 116,000 metric tonnes of corn for delivery to unknown destinations during the 2008/2009 marketing year, the USDA said Thursday.