June 11, 2009

 

CBOT Corn Outlook on Thursday: Up 2-4 cents; rebound, overnight theme

 

 

Chicago Board of Trade corn futures are poised to climb on Thursday's open following overnight gains in a rebound from Wednesday.

 

Corn is called 2 to 4 cents higher. In overnight trade, July corn was up 3 3/4 cents to US$4.39 1/2 per bushel, September corn was up 3 cents to US$4.47 3/4 and December corn was up 3 1/2 cents to US$4.61 1/2.

 

Outside markets, including a weaker dollar and stronger crude oil, supported the overnight gains, but those influences are mixed this morning, traders and analysts said.

 

The market fell Wednesday in an outside day lower, despite what traders saw as a mildly friendly U.S. Department of Agriculture supply and demand report. The report cut projected yield for this year's crop by 2 bushels per acre and cut projected 2009-10 ending stocks.

 

The market's slide Wednesday following the report was seen as bearish technically. Prices are still in a six-week-old uptrend on the daily bar chart, "but now just barely," a technical analyst said.

 

The next upside price objective is to push and close prices above solid technical resistance at last week's high of US$4.50 a bushel, the technical analyst said. The next downside price objective for the bears is to push and close prices below solid technical support at US$4.21 3/4 a bushel.

 

First resistance for July corn is seen at US$4.40 and then at US$4.45. First support is seen at this week's low of US$4.34 3/4 and then at US$4.30.

 

The trade will continue to monitor the weather and crop development, with chilly weather seen as supportive because it slows the crop's growth. However, some analysts say the market does not have the demand to push much higher.

 

Weekly net export sales were reported at 863,000 metric tonnes, according to the USDA. That includes 713,100 tonnes for the 2008-09 marketing year and 149,900 for the 2009-10 marketing year.

 

Sales were up from 658,800 the previous week, and above analyst expectations.

 

In other export news, South Korea's Nonghyup today issued tenders for 275,000 metric tonnes of corn, 55,000 tonnes of feed wheat and 110,000 tonnes of soybean meal, a trader with the company said Thursday.

 

The cargos are expected to arrive between October and December.

 

"Origin-wise we are looking worldwide, though we are specifically looking at the U.S. for the corn, Eastern Europe for the wheat and South America for the soybean meal," he said.