April 15, 2009

 

CBOT Corn Outlook on Wednesday: Steady-down 2 cents amid weak fundamentals

 

 

Chicago Board of Trade corn futures are expected to open steady to slightly lower Wednesday following overnight losses, as weak fundamentals keep the market trailing gains in soybeans, analysts said.

 

Corn is called steady to 2 cents lower. In overnight trading, May corn was down 1 1/2 cents to US$3.92 3/4 per bushel and July corn was down 1 1/2 cents to US$4.02.

 

The market is range-bound despite the ongoing surge in soybeans, which speaks to corn's fundamentals, MF Global Research analyst Rich Feltes said in a morning commentary.

 

The corn market is "haunted by negative margins in ethanol and feeding," Feltes said.

 

Soybeans, which have climbed due in part to a weak South American crop, should limit any losses in corn, analysts said.

 

Weather is seen as a mixed influence. One trader said an increased chance for drying next week, particularly in the western U.S. corn belt, should help farmers get some field work and planting done.

 

Feltes noted high soil moisture throughout much of the corn belt, which will delay planting opportunities.

 

Still, he said "we're reluctant to jump on bull planting delay bandwagon until (the) last week of April given last's year's better than expected corn yield in wake of planting delays and late spring flooding," Feltes said.

 

Outside markets "aren't providing much in the way of direction - or headwinds - this morning," Farm Futures said in a morning commentary.

 

While soybeans' strength is underpinning the market, corn has formidable resistance at US$4 and from producer selling, traders said.

 

The next upside price objective is to push and close May prices above solid technical resistance at the April high of US$4.17 1/2 per bushel, a technical analyst said. The next downside price objective for the bears is to push and close prices below solid technical support at US$3.87 1/2 a bushel.

 

First resistance for July corn is seen at Tuesday's high ofUS$4.08 1/2 and then at US$4.14. First support is seen at US$4.00 and then at Tuesday's low of US$3.94 3/4.

 

The May contract is slightly below its 20-day moving average of US$3.94 1/2 but above both its 50-day and 100-day moving averages.