August 20, 2009

CBOT Corn Outlook on Thursday: Steady-weak; midwest weather deemed "perfect"

Corn futures at the Chicago Board of Trade are called to open around steady to slightly lower levels Thursday morning.

December corn was last traded in overnight electronic trading down 1/4 cent a bushel at RMB3.27 1/4.

Late-season growing weather in the Corn Belt is "perfect" for the corn crop, said Brian Hoops, the president of Midwest Market Solutions. He said the extended forecasts calling for warmer temperatures in the Corn Belt are just what the doctor ordered for a corn crop that is generally behind in its maturity pace.

The National Weather Service forecast for Aug. 25-29 calls for below-normal precipitation across the western Corn Belt and into Illinois. Above-normal temperatures are expected across the West, the Dakotas and into Nebraska and western Minnesota, while cooler temperatures are expected in Indiana eastward.

The weekly USDA export sales report showed strong corn sales of 577,000 metric tonnes in the 2008-09 marketing year, with 858,500 metric tonnes of corn sold for the 2009-10 marketing year. Traders expected the report to show corn sales of 700,000 to 1,000,000 metric tonnes. The strong weekly sales data will limit the downside in corn futures Thursday, said another analyst.

Corn traders will continue to keep a close eye on the crude oil market, said Hoops. He said any bigger price moves in the crude oil will have a corresponding price influence on corn.

The Pro Farmer Midwest Crop Tour found an average Illinois corn yield of 167.17 bushels per acre, which compares to last year's yield of 166.94 bushels and a 3-year average of 169.29 bushels per acre. Thursday, the eastern leg of the tour will take samples in eastern Iowa, while the western leg scouts will start in western Iowa. Both routes will meet for their final meeting in Austin, Minnesota, with final tour results from Iowa and Minnesota released Thursday evening.

Technically, a market technician said the corn bears still have the solid near-term technical advantage at present. The corn bulls' next upside price objective is to push prices above solid technical resistance at last week's high of RMB3.45 a bushel. The next downside price objective for the bears is to push and close prices below major psychological support at RMB3.00 a bushel. First resistance for December corn is seen at RMB3.30 and then at RMB3.35. First support is seen at RMB3.25 and then at RMB3.20.