July 15, 2009

 

CBOT Corn Outlook on Wednesday: Up 1-2 cents on outside market support

 

 

Chicago Board of Trade corn futures are expected to open 1 to 2 cents higher Wednesday on support from a weaker dollar and higher crude oil, analysts said.

 

In overnight trading, September corn was up 1 1/2 cents to US$3.40 per bushel and December corn was up 1 1/4 cents to US$3.46 3/4.

 

The market has little bullish news, but after breaking hard the past couple weeks corn prices are unlikely to dip much further in the near-term, traders say. The big story for corn and other commodities Wednesday appears to be the dollar, said Jerry Gidel, analyst with North America Risk Management Services.

 

The weaker dollar is supporting gains in crude oil, a trader notes, which is tied to corn prices because of corn's role in the energy market through ethanol.

 

Cash prices have remained firm as farmers refuse to sell following the recent break. Gidel said that farmers are waiting to see if problems during corn's pollination period cause prices to rebound.

 

At the same time export demand has been steady, supporting prices.

 

"It seems like the U.S. has reached quite a competitive position on both bean and corn exports right now," a trader said.

 

A group of South Korean feedmillers led by the Korea Feed Association purchased 110,000 metric tonnes of corn and 55,000 tonnes of U.S. soymeal in tenders concluded late Tuesday, a trader with KFA said Wednesday.

 

Also, analysts said that Taiwan has purchased 23,000 metric tonnes of U.S. corn for August delivery.

 

Weather remains a bearish factor in the market, traders said. Rainfall this week is ample throughout much of the U.S. corn belt, and as the crop enters its key pollination period there is no sign of extreme heat in the weather forecast.

 

The next upside price objective is to push and close prices above solid technical resistance at last week's high of US$3.58 a bushel, a technical analyst said. The next downside price objective for the bears is to push and close prices below strong longer-term technical support at US$3.25 a bushel.