April 16, 2009

 

CBOT Corn Outlook on Thursday: Down 1-2 cents; weather, demand concerns weigh

 

 

Chicago Board of Trade corn futures are expected to open slightly lower Thursday following overnight losses as improved planting weather and concern about demand weigh.

 

Corn is called 1 to 2 cents lower. In overnight trading, May corn was down 1 cent to US$3.83 1/2 per bushel, July corn was down 3/4 cent to US$3.93 1/4 and December corn is down 1/2 cent to US$4.14 3/4.

 

The market is underpinned by strength in soybeans, but does not have its own fundamental strength, traders and analysts said. The U.S. corn belt is seeing enough dry weather to allow farmers to plant in what has so far been a slow start to the season, traders said.

 

Conditions will be dry Thursday and Friday, and mostly dry Saturday, according to DTN Meteorlogix. After rain returns later in the weekend and early next week, "warmer, drier weather during the middle to latter part of next week will improve fieldwork conditions and warm soil temperatures."

 

Demand concerns in both feed and ethanol hit the market Thursday. Traders and analysts said reports that 160,000 metric tonnes of feed wheat from Denmark was being imported into the U.S. weighed.

 

The trade is also talking about a vote in California scheduled for late next week on a new emissions standard that could potentially curb ethanol usage.

 

"That depressed corn and helped it diverge all that much more from the soy complex," a trader said.

 

Weekly export sales reported Thursday were at the high end of expectations. The USDA reported weekly net export sales of 1.029 million metric tonnes, including 149,800 tonnes for the 2009-10 marketing year. Analysts had expected total sales between 700,000 and 1.1 million tonnes. Sales were reported at 1.081 million tonnes the previous week.

 

In other export news, the U.S. Department of Agriculture on Thursday announced private export sales of 232,000 metric tonnes of corn for delivery to unknown destinations in the 2008-09 marketing year.

 

The next upside price objective is to push and close July prices above solid technical resistance at the April high of US$4.17 1/2, 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 US$4.00 and then at Wednesday's high of US$4.04. First support is seen at this week's low of US$3.92 1/2 and then at US$3.90.