April 29, 2009

 

CBOT Corn Outlook on Wednesday: Up 2-3 cents; overnight gains, wet weather

 

 

Chicago Board of Trade corn futures are expected to open 2 to 3 cents higher Wednesday following overnight gains and the support of wet U.S. corn belt weather.

 

In overnight trade, May corn was up 3 1/4 cents to US$3.78 1/4 per bushel and July corn was up 3 1/4 cents to US$3.86 3/4.

 

Planting is a key focus of the market currently, and although progress through Sunday was better than expected, wet weather and forecasts calling for more rain in both the short-term and long-term forecasts is highlighting concerns about delays. The crop, which is already behind schedule, generally produces a better yield the earlier it is planted, because it then has a better chance of avoiding weather threats later in the season, including summer heat and an early first frost.

 

DTN Meteorlogix said that "rains and wet weather over the southern and east Midwest region will keep planting progress slow this week."

 

The "sloppy" weather is keeping sellers on the sidelines and underpinning the market, traders said. But the market remains in a range, with farmer selling and the swine flu outbreak limiting upside potential, traders added.

 

Concerns about the swine flu have eased, although traders say it still has the potential to hurt demand, as pork production is curtailed.

 

"Without a significant outbreak in deaths, the market can discount it, at least for the time being," a floor trader said.

 

In export news, analysts said that South Korea has tendered for 220,000 metric tonnes of corn. The demand is supportive, although the U.S. will have competition for the business, analysts said.

 

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 last week's and this week's low of US$3.70 a bushel.

 

First resistance for July corn is seen at Tuesday's high of US$3.86 and then at US$3.90. First support is seen at US$3.80 and then at Tuesday's low of US$3.76 3/4.

 

In other markets, China's corn prices in major producing areas were mostly stable in the week to Wednesday as farmers didn't have much stock left to sell, while demand was weak.