April 7, 2009

 

CBOT Corn Outlook on Tuesday: Down 2-3 cents on dollar, crude

 

 

Chicago Board of Trade corn futures are expected to open 2 to 3 cents lower Tuesday as a stronger dollar and weaker crude oil weigh, analysts said.

 

Corn is called 2 to 3 cents lower. In overnight trading, May corn was down 3 cents to US$4.02 1/2 per bushel, July corn was down 3 cents to US$4.12 3/4 and December corn was down 2 3/4 cents to US$4.34.

 

Outside markets should set the market's direction, analysts said, and are pointing lower Tuesday. In addition to crude oil and the dollar, neighboring grains markets are also weighing on corn, analysts said.

 

"Corn remains directionless and at the mercy of spreading versus wheat and soybeans," Fortis said in a morning commentary. "It may remain that way until farmers decide to step up their selling or outside markets give the grains a bigger push in one direction or the other."

 

Another analyst said wheat could offer some support if reports emerge of cold weather in the U.S. Plains damaging the crop.

 

Corn is getting some support from concerns about wet weather in the U.S. corn belt, analysts say. Recent wet, cold weather and forecasts calling for similar conditions could keep farmers from doing fieldwork and planting through the middle of the month, analysts say.

 

The delays could potentially prompt farmers to switch acres from soybeans to corn, analysts said.

 

Although recent gains in equities have helped support grains, some traders think that climb will be short-lived, and that bearish concerns about the economy will reassert themselves, pressuring commodities.

 

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

 

First resistance for May corn is seen at last week's high of US$4.07 1/2 and then at US$4.13, the technical analyst said. First support is seen at US$4.00 and then at US$3.95.

 

In other news, Brazil should produce 51.9 million metric tonnes of corn in 2008-09, the National Commodities Supply Corp., or Conab, said Tuesday.

 

Total production is seen falling 11.5% from the 2007-08 season and slightly above its March estimate of 50.3 million tonnes for 2008-09.