April 6, 2009

 

CBOT Corn Outlook on Monday: Higher on planting concerns, soy support

 

 

Chicago Board of Trade corn futures are expected to open higher Monday on spillover strength from soybeans and concerns about early planting.

 

Corn is called 1 cent to 3 cents higher. In overnight trade, May corn was up 1 1/2 cents to US$4.06 per bushel, July corn was up 1 1/2 cents to US$4.16 1/4 and December corn was up 1 3/4 cents to US$4.37 1/4.

 

Much of the Midwest saw wet weather, including snow, over the weekend, which will push back early planting, analysts said. They add that weather is expected to continue to be cold and wet throughout the next couple weeks in the U.S. corn belt.

 

"There does not appear to be any meaningful chance to commence corn seeding into mid month," AgResource Company said in a morning commentary.

 

In addition to delaying corn planting, the inability for farmers to get into the field and complete fieldwork could prompt some producers to switch to soybeans, according to some analysts.

 

The market is technically strong, analysts said. After failing for weeks to maintain gains above US$4 in the May contract, corn spent the Thursday and Friday above that level.

 

Corn also has support from soybeans and wheat, analysts said. Nearby soybeans contracts climbed above psychological resistance at US$10 in overnight trading, which should prompt technical buying, a trader said.

 

The next upside price objective for corn is to push and close May prices above solid technical resistance at US$4.18, a technical analyst said. The next downside price objective for the bears is to push and close prices below solid technical support at last week's low of US$3.76 3/4 a bushel.

 

Resistance for May corn is seen at Friday's high of US$4.05 and then at last week's high of US$4.07 1/2, the technical analyst said. First support is seen at US$4.00 and then at Friday's low of US$3.97 1/2.

 

In export news, the U.S. Department of Agriculture reported Monday morning that 116,000 metric tonnes of corn had been sold to unknown destinations.

 

Speculative funds added 6,836 contracts to their CBOT corn long positions and added 789 contracts to their short positions, putting them net long 19,514 contracts, the Commodity Futures Trading Commission said Friday.

 

The supplemental commitment of traders report also showed that commercial funds added 8,983 contracts to their long positions and added 10,067 contracts to their short positions, putting them net short 180,934 contracts. Index funds added 6,888 contracts to their long positions and added 1,167 contracts to their short positions, putting them net long 246,830 contracts, the CFTC said.