July 1, 2009

Chicago Board of Trade December corn futures are locked down the 30-cent trading limit at US$3.67 1/4 a bushel, in the wake of an extremely bearish US acreage figure issued Tuesday (June 30) morning.

The US Department of Agriculture estimated 2009 corn acreage at 87.035 million acres, up 1 percent from last year, and above the March planting intentions estimate of 84.986 million. The figure was well above the average analyst estimate of 84.158 million acres.

December corn hit a fresh six-month low and is poised to close at a bearish monthly, quarterly and semi-yearly low close. The monthly continuation chart for nearby corn futures is also poised to produce a bearish "outside month" down, whereby June's high was higher and low was lower than the month of May's trading range.

Major chart damage has been inflicted on the corn futures market recently, heading into the key trading month of July. History shows that the trading days following the US Independence Day holiday can find price trends in the grain futures markets either accelerating or reversing.

The next downside price objective for the powerful corn market bears is to push and close December futures prices below solid chart support at the contract low of US$3.49 1/4, scored in early December.

For the corn market bulls to begin to gain some fresh upside near-term technical momentum they would have to produce multiple closes in December futures back above major psychological resistance at US$4.00 a bushel.