June 17, 2009

 

CBOT Corn Outlook on Wednesday: Down slightly; lack of supportive news

 

 

Chicago Board of Trade corn futures are expected to open slightly lower Wednesday amid a lack of supportive news and pressure from outside markets, traders said.

 

Corn is called 1 to 2 cents lower. In overnight trading, July corn was flat at US$4.04 per bushel, September corn was down 1/2 cent to US$4.12 1/4 and December corn was down 1/4 cent to US$4.25.

 

After weeks of worrying about rainy weather keeping farmers from planting, the moisture is now mostly seen as beneficial to the crop, and bearish for prices.

 

"They've got it planted," a trader said. "As long as it's not flooding rains, it's good."

 

But he also said that the crop could use some hot, sunny weather to boost crop development. A trader said that long-range forecasts show that a warming trend is likely.

 

The DTN Meteorlogix forecast calls for showers and thunderstorms in the eastern corn belt Wednesday, followed by scattered to widely scattered showers and thunderstorms throughout the Midwest through Saturday.

 

Outside markets are seen as slightly bearish. Although the dollar was choppy overnight, it appeared to be firming up Wednesday morning, traders said. Other outside markets, including crude oil and equities, are lower and will also weigh, they said.

 

Without any bullish outside influences, the market is also lacking fundamental strength, a trader said.

 

"We just don't have a bullish catalyst yet," the trader said.

 

Technical the market has sustained some near-term chart damage, a technical analyst said.

 

"Bulls need to show fresh power soon, or else a market top is likely in place," the technical analyst said.

 

The bulls' next upside price objective is to push and close July prices above solid technical resistance at US$4.50 a bushel, a technical analyst said. The next downside price objective for the bears is to push and close prices below psychological support at US$4.00 a bushel.

 

First resistance for December corn is seen at US$4.30 and then at Tuesday's high of US$4.32 3/4. First support is seen at Tuesday's low of US$4.24 and then at US$4.20.

 

Country Hedging analyst Vivian M. Kim said in market commentary that the market's downside potential could be limited by "thoughts that the June 30 Crop Acreage report will show lower corn plantings and generally good export demand."