June 24, 2009

 

CBOT Corn Outlook on Wednesday: Flat; slide halted, but support limited

 

 

Chicago Board of Trade corn futures are expected to open flat Wednesday, with mixed outside markets and a lack of fundamental news prompting two-sided trade, analysts said.

 

In overnight trading, July corn was up 1/4 cent to US$3.89 1/4 per bushel, September corn was flat at US$3.97 1/4 and December corn was flat at US$4.09.

 

Analysts said without any news or outside direction the market consolidated overnight. That could continue ahead of next Tuesday's acreage and quarterly grain stocks reports, they said.

 

The market has for the moment halted its steep recent slide, as prices showed modest gains Tuesday amid short-covering and ideas the market was oversold. But the gains of less than four cents were disappointing to some given Tuesday's outside market support.

 

"One would think with the U.S. dollar was down a full penny and the crude oil closing up US$1.74 that corn would have had a better day," Mark Gold, managing partner of Top Third Ag Marketing, said in a market commentary.

 

Funds bought an estimated 4,000 to 6,000 contracts Tuesday, but analysts say fund liquidation could remain a bearish presence, as the market's recent trend-change inspires more selling.

 

Recent hot, wet weather is seen as mostly beneficial for the crop, and bearish for the market.

 

The pattern will continue, with scattered thunderstorms moving from west to east through the corn belt Wednesday and Thursday, and again on Saturday and Sunday, according to DTN Meteorlogix.

 

The trade is expecting reduced acreage on Tuesday's acreage report from the U.S. Department of Agriculture. Tuesday is also first notice day for July futures. July options expire on Friday, and Farm Futures notes large open interest at US$3.90 and US$4 strike prices.

 

The next upside price objective is to push and close December 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 strong technical support at US$3.90 a bushel.

 

First resistance for December corn is seen at Tuesday's high of US$4.09 3/4 and then at US$4.15, the technical analyst said. First support is seen at this week's low of US$4.00 and then at US$3.95.