May 29, 2009

 

CBOT Corn Outlook on Friday: Up 2-4 cents on dollar, exports, planting

 

 

Chicago Board of Trade corn futures are expected to open higher Friday on a weaker dollar and strong export sales, analysts said.

 

Corn is called 2 to 4 cents higher. In overnight trading, July corn was up 4 1/4 cents to $4.33 per bushel, September corn was up 4 cents to $4.43 and December corn was up 4 cents to $4.56 1/4.

 

Weakness in the dollar was a key supportive factor for corn and other markets overnight, traders said.

 

"The markets were mixed, then the dollar got pummeled and everything took off again," a trader said.

 

Development of the crop is a focus of the market, but the trade has differing views on how much progress farmers will make before rains return early next week. Analysts say that corn that doesn't get planted by Monday might not get planted at all, as the planting window starts to shut.

 

The DTN Meteorlogix forecast calls for mostly dry conditions in the U.S. corn belt through Sunday, with scattered showers and thunderstorms developing across the northern half of the corn belt Monday. On Tuesday there will be thundershowers through central areas, but it will be mostly dry in the far northern and far southern areas of the corn belt.

 

In addition to the weaker dollar, stronger crude oil prices should support, traders said. Analysts say the recent strength in crude oil is supportive for ethanol, which in turn gives corn a boost.

 

The U.S. Department of Agriculture on Friday reported strong weekly export sales of 1.023 million metric tonnes. That included net sales for the 2008-09 marketing year of 756,200 metric tonnes, up 11% from the previous week but down 12% from the prior 4-week average.

 

Technically, the market tested but failed to take out recent highs on Thursday.

 

"The fact July could not close over the recent highs did not look good," Peter C. McKeegan, analyst for Top Third Ag Marketing, said in a market commentary. "December corn tried, again, to break through the recent highs, and could not close over those levels. This, also, did not look good."

 

The bulls' next upside price objective is to push and close July prices above solid technical resistance at the January high of $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 $4.06 1/4 a bushel.

 

First resistance for July corn is seen at Thursday's high of $4.34 3/4 and then at $4.40, the technical analyst said. First support is seen at this week's low of $4.21 3/4 and then at $4.17 1/4.