April 23, 2009

 

CBOT Corn Outlook on Thursday: Up 1-2 cents on outside support, export sales

 

 

Chicago Board of Trade corn futures are expected to open slightly higher Thursday on supportive outside markets and a strong export sales report following flat overnight trade, traders said.

 

Corn is called 1 to 2 cents higher. In overnight trading, May corn was flat at US$3.73 1/2 per bushel and July corn was flat at US$3.82 1/2.

 

The flat trade followed similar action Wednesday, as traders cautiously await more direction from the weather. The trade is currently "on the fence" as to how planting is progressing.

 

"We're kind of torn between he fact that we're making some decent progress here for the balance of this week and the impending forecast for more rain down the road," Foreman said.

 

He notes that even with the planting window opened, this week's progress might still be below normal, since farmers in some cases have had to wait for fields to dry. Longer-range forecasts for the next week to two weeks call for more rainfall, potentially delaying planting further.

 

But the market "doesn't seem too willing at this point to get excited about planting delays," a floor trader said.

 

The DTN Meteorlogix forecast calls for dry conditions in the U.S. corn belt through Sunday, except for some rain in northwest areas Saturday and Sunday. The eastern corn belt will remain dry Monday, with rain in other areas.

 

Export sales were strong Thursday. The U.S. Department of Agriculture reported weekly net sales of 1.280 million metric tonnes. The trade had estimated between 700,000 and 1.1 million metric tonnes.

 

Net sales of 1,214 metric tonnes for the 2008-09 marketing year were up 40% from the previous week and 11% from the prior 4-week average, the USDA said.

 

Outside markets, particularly equities and crude oil, are supportive Thursday morning, traders said.

 

The trade is awaiting news from California on a new low-carbon emissions standard that analysts say could, eventually, drastically cut ethanol usage. The state's air resources board holds a public hearing on the matter Thursday before making a decision.

 

Analysts say the new standard would add psychological pressure to the market, although there are still a lot of unknowns as to how -- or whether -- the standard would be implemented.

 

The next upside price objective is to push and close prices above solid technical and psychological resistance at US$4.00 a bushel. The next downside price objective for the bears is to push and close prices below solid technical support at the March low of US$3.54 a bushel.

 

First resistance for July corn is seen at this week's high of US$3.87 3/4 and then at US$3.90. First support is seen at US$3.80 and then at this week's low of US$3.77 3/4.