May 11, 2009

 

CBOT Corn Outlook on Monday: Down 2-4 cents on profit-taking, weather

 

 

Chicago Board of Trade corn futures are expected to open lower Monday amid profit-taking and pressure from outside markets, analysts said.

 

Corn is called 2 to 4 cents lower. In overnight trading, May corn was down 3 cents to US$4.11 per bushel, July corn was down 3 3/4 cents to US$4.17 1/4 and December corn was down 3 3/4 cents to US$4.36.

 

Traders said a variety of markets appear poised for a round of profit-taking Monday following recent gains. Weaker crude oil, equities and soybeans could set the tone, they said.

 

Although rain is still expected over the next week, weather forecasts are also somewhat better for the eastern U.S. corn belt, which could weigh on prices, traders said. Farmers in the eastern corn belt should have another couple days of dry weather before rains return, and traders said forecasts extending out to 15 days show opportunities for planting.

 

The corn market surged Friday, ending near the week's high, up 24 cents from the week's low.

 

Country Hedging analyst Joe Barker noted in a morning commentary that open interest on Friday's rally climbed 17,337 contracts.

 

"When you see futures prices set new high prices for the move and open interest increase dramatically on the same day, most technical traders believe that to be a bullish scenario," he said.

 

The recent shift in sentiment was shown in a Friday report from the Commodity Futures Trading Commission. Speculators added 25,491 contracts to their CBOT corn long positions and cut 21,263 from their short positions, putting them net long 8,671 contracts, the CFTC said.

 

The supplemental commitment of traders report also showed that commercial funds cut their long positions by 14,704 contracts and added 37,000 contracts to their short positions, putting them net short 187,692 contracts. Index funds added 7,185 contracts to their long positions and cut 1,304 contracts from their short positions, putting them net long 270,274 contracts, the CFTC said.

 

"You've definitely seen a nice new influx of managed money," a trader said.

 

On a continuation chart, corn on Friday approached the 200-day moving average around US$4.24.

 

The next upside price objective is to push and close prices above solid technical resistance at the January high of US$4.49 1/4 a bushel, a technical analyst said. The next downside price objective for the bears is to push and close prices below solid technical support at last week's low of US$3.96 1/2 a bushel.

 

First resistance for July corn is seen at Friday's high of US$4.21 1/4 and then at US$4.25. First support is seen at US$4.15 and then at US$4.10.