June 25, 2009

 

CBOT Corn Outlook on Thursday: Down slightly; weather weighs on market

 

 

Chicago Board of Trade corn futures are expected to open lower Thursday following modest overnight losses as the trade consolidates ahead of next week's key acreage report.

 

Corn is called down 2 to 3 cents. In overnight trade, July corn was down 2 1/2 cents at US$3.84 and December was down 3 cents at US$4.04 1/4.

 

Traders and analysts said there is little fundamental news to move the market. Without any strong direction, the market will consolidate until the U.S. Department of Agriculture issues updated acreage estimates.

 

"Look for the balance of the week to offer choppy trade ahead of the USDA's reports on Tuesday of next week," Benson Quinn Commodities analyst John Hanson said in a market commentary.

 

Analysts said weather forecasts are neutral or bearish, and the market is likely to remain under pressure unless the weather starts to threaten the crop.

 

"I think the problem for corn is the weather is bearish," a floor analyst said.

 

Scattered rains and thunderstorms Thursday and Friday, with more rain moving from west to east across the corn belt Saturday and Sunday, should help crops, said DTN Meteorlogix. Temperatures will be above normal through the week but should cool to below normal Sunday.

 

The floor analyst said that technically the market looks bad, but that it appears to have strong support around US$4 in the December contract.

 

Weekly net export sales totaled 936,700 metric tonnes, the USDA said Thursday morning. Analysts had expected sales between 600,000 and 1 million metric tonnes. Sales last week were 1.143 million.

 

Sales were 686,400 for the 2008-09 marketing year and 250,300 for the 2009-10 marketing year.

 

Analysts said the sales were good, but won't be a major factor in Thursday's trade.

 

The bulls' next upside price objective is to push and close December prices above solid technical resistance at US$4.30 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 Wednesday's high of US$4.11 1/4 and then at US$4.15, a technical analyst said. First support is seen at this week's low of US$4.00 and then at US$3.95.