May 21, 2009

 

CBOT Corn Outlook on Thursady: Lower on outside markets, technical pressure

 

 

Chicago Board of Trade corn futures are expected to open lower Thursday on outside market pressure and follow-through selling, traders said.

 

Corn is called 2 to 4 cents lower. In overnight trade, July corn was down 3 1/4 cents to US$4.22 3/4 per bushel and December corn was down 3 1/4 cents to US$4.44.

 

Weaker soybeans, crude oil and equities are expected to weigh on corn, traders and analysts said. Analysts also noted that corn closed weakly on Wednesday, near the low end of the range.

 

"Basically we're looking for technical setbacks today, also positioning to start ahead of the long holiday weekend, with traders unwilling to carry positions over three days given the possible change in the weather forecast," said Terry Reilly, analyst for Citigroup.

 

The market will be closed Monday for Memorial Day, which should prompt caution Thursday and Friday, a trader said.

 

"Who knows what the weather is going to be Tuesday?" he said.

 

The trade is eyeing weather forecasts, with a focus on how long the planting window for growers in the eastern corn belt will remain open.

 

DTN Meteorlogix said that rainfall will arrive in the eastern corn belt early next week, continuing into midweek.

 

"A turn to drier weather with mild temperatures is now indicated for the latter half of next week favoring corn and soybean planting," the forecast said.

 

This week's warm, rain-free weather has helped the eastern corn belt, where planting delays have been severe, dry out. Mark Gold, managing partner of Top Third Ag Marketing, said he has clients in Illinois that were starting to plant Wednesday, while others were going to have to wait until Friday.

 

Weekly export sales were at the low end of expectations. The U.S. Department of Agriculture reported net sales of 822,100 metric tonnes, including 683,400 tonnes for 2008-09 and 138,600 for 2009-10. Sales were down from 1.183 million the prior week, and analysts had estimated sales of 800,000 to 1.300 million tonnes.

 

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 US$4.00 a bushel.

 

First resistance for July corn is seen at Wednesday's high of US$4.34 3/4 and then at US$4.40. First support is seen at Wednesday's low of US$4.23 and then at US$4.20.

 

Reilly said the July contract has potential support at US$4.18 and then US$4.15.