July 16, 2009

 

CBOT Corn Outlook on Thursday: Lower on weather, bearish crop outlook

 

 

Chicago Board of Trade corn futures are expected to open lower Thursday on a bearish crop outlook as ideal growing weather continues.

 

Corn is called 3 to 5 cents lower. In overnight trade, September corn was down 5 3/4 cents to US$3.23 3/4 per bushel and December corn was down 5 cents to US$3.32 1/2.

 

The market had a bearish outside day Wednesday, opening higher before slumping. Moderate temperatures and adequate rainfall are the main focus of the market, analysts said.

 

"The problem for the technical trader appears to be a lack of support from the fundamental crowd at the present time," Benson Quinn Commodities analyst Jon Michalscheck said in a market commentary. "Adequate old crop supplies and a non-threatening outlook for new crop at the present time has the market providing ample overhead resistance on attempts to add back risk premium."

 

Weekly export sales reported Thursday were strong. The U.S. Department of Agriculture reported weekly net sales of 1.168 million metric tonnes, nearly identical to the previous week's total of 1.165 million. Trade estimates for this week's sales ranged from 600,000 to 1.050 million metric tonnes.

 

Traders and analysts say the recent break in prices has made U.S. corn more attractive for importers, although Farm Futures noted in a morning commentary that "buying appears to be mostly from regular customers."

 

Traders and analysts also say that demand for ethanol and feed remains questionable.

 

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.

 

First resistance for December corn is seen at US$3.40 and then at US$3.46. First support is seen at Wednesday's low of US$3.35 3/4 and then at US$3.30.

 

In international news, China will sell 500,000 metric tonnes of soybeans and 2 million tonnes of corn next week, according to a statement published on the China National Grain and Oils Information Center's Web site Thursday.

 

The announcement is unlikely to affect soybean prices much, though corn prices could be pressured somewhat, analysts said.