July 30, 2009

 

CBOT Corn Outlook on Thursday: Up 3-5 cents on soy, crude, exports

 

 

Chicago Board of Trade corn futures are expected to open higher Thursday on outside market support and underlying commercial support, analysts said.

 

Corn is called 3 to 5 cents higher. In overnight trade, September corn was up 4 3/4 cents to US$3.25 1/2 per bushel and December corn was up 5 cents to US$3.33.

 

Corn should have support from "slightly supportive" macro markets, a trader said, with higher crude oil and a weaker dollar giving prices a boost. Soybeans are the leader to the upside, traders added, and are expected to climb about 20 cents on the open.

 

The corn market dipped slightly Wednesday, but traders said its performance was still impressive given crude oil's sharp drop on the day. Country Hedging said in a morning commentary that "commercial interests continue to support the September corn while funds continue to short December corn."

 

Traders and analysts say the market is settling into a sideways trading range, as it is unable to push much further lower because it has already lost almost US$1.50 since early June. At the same time, the crop outlook remains bearish, with this summer's cool U.S. corn belt weather expected to continue.

 

DTN senior analyst Darin Newsom said in a morning commentary that "buying enthusiasm in corn remains dull."

 

Traders say that the market's drop this summer has attracted export demand, and sales were strong again Thursday. The U.S. Department of Agriculture reported net weekly sales of 1.256 million metric tonnes, down from last week's total of 1.335 million tonnes but above trade expectations of 700,000 to 1.200 million tonnes.

 

In international news, the world's 2009-10 grain output forecast has been revised up to 1.733 billion metric tonnes, but is still 57 million tonnes less than the record 2008-09 crop, the International Grains Council said Thursday.

 

The 18-million tonne rise from June's world grain production estimate is partly due to larger than expected U.S. corn plantings, said the IGC.

 

The next upside price objective is to push December prices above solid technical resistance at US$3.56 3/4 a bushel, which would fill on the upside a downside price gap on the daily bar chart, a technical analyst said. The next downside price objective for the bears is to push and close prices below solid technical support at the contract low of US$3.14 3/4 a bushel.

 

First resistance for December corn is seen at Wednesday's high of US$3.30 3/4 and then at US$3.35, the technical analyst said. First support is seen at US$3.25 and then at Wednesday's low of US$3.22 3/4.