May 14, 2008

 

CBOT Corn Outlook on Wednesday: 2-4 cents lower on weather, overnight losses

 

 

Chicago Board of Trade corn futures are expected to open 2-4 cents a bushel lower Wednesday on improved planting prospects and overnight losses, traders said.

 

In overnight trade, May corn was down 3/4 cent to US$5.96 3/4 per bushel, July was down 4 cents to US$6.03 1/4, and December was down 4 cents to US$6.27.

 

A trader said he expected light trading Wednesday following a "low-volume, slightly corrective tone overnight." Forecasts calling for drier weather in the U.S. corn belt this weekend and next week should allow farmers the opportunity to get into the fields and aggressively plant, they noted.

 

The DTN Meteorlogix weather forecast calls for scattered showers and a few thundershowers in central and eastern parts of the corn belt Wednesday, and between 0.10 and 0.50 inches of rain in the southern corn belt Thursday. Friday, Saturday and Sunday are expected to be dry.

 

Analysts said planting progress, which was 51% complete as of May 11 according to the U.S. Department of Agriculture, could reach 80% by Sunday.

 

But plantings are still well behind their average pace, which continues to lend support, a trader said.

 

"I don't see (prices retreating) too far," the trader said.

 

Outside markets are soft, a trader said. The dollar fell initially after the release of the government's April Consumer Price Index Wednesday morning, but remains stronger on the day, which should add to the downward pressure on corn and other commodities, he said.

 

The next upside price objective is to push prices above solid technical resistance at US$6.13 3/4, according to a technical analyst. The next downside price objective is to push and close prices below US$5.95, which was Tuesday's low.

 

First resistance is seen at US$6.10 and then at US$6.13 3/4, the analyst said. First support is seen at US$6.00 and then at US$5.95.

 

In international news, corn prices in China's major producing regions were higher in the week to Wednesday on dwindling supply. Industrial processing plants in northeast producing areas continued to raise corn bidding prices as farmers were reluctant to sell due to expectations of further increases in prices, the China National Grain and Oils Information Center said in a note.