September 3, 2009

 

CBOT Corn Outlook on Thursday: Up slightly amid modest short-covering

 

 

Chicago Board of Trade corn futures are expected to open slightly higher Thursday amid short-covering and positioning ahead of the holiday weekend.

 

Corn is called 1 to 2 cents higher. In overnight trading, September corn was up 3/4 cent to US$3.14 per bushel, December corn was up 1/2 cent to US$3.19 3/4 and March corn was flat at US$3.32 1/2.

 

With a large U.S. crop expected, the market has little fundamental support - Country Hedging said in a commentary that gains today would be a "dead-cat bounce." Arlan Suderman, analyst for Farm Futures, said the market has simply gotten to the bottom of the trading range, which has been low enough to attract a little interest from buyers.

 

The December contract has closed at US$3.19 1/4 for two straight days, which was the summer's previous low close.

 

The market could move sideways the next couple of days, as it did Wednesday, traders and analysts said.

 

"I think we'll see a little bit of a tendency to do some short-covering ahead of the three-day holiday weekend, just in case the weather forecast might change," Suderman said.

 

Suderman said there could be a "slight tailwind" from outside markets, with a weaker dollar and firmer crude oil.

 

In export news, The Korea Feed Association is seeking 55,000 metric tonnes of optional-origin corn for arrival March 15 in a tender to be concluded at 0730 GMT Thursday, a KFA official said.

 

The U.S. Department of Agriculture reported weekly net export sales of 938,900 metric tonnes for the week ended Aug. 27. That includes sales of 344,900 for 2008-09 and 594,000 for the 2009-10 marketing year.

 

Estimates had ranged from 550,000 to 1.1 million metric tonnes. The previous week's total was 973,200 tonnes.

 

There were 166 deliveries reported against the September futures contract Wednesday morning.

 

The corn bulls' next upside price objective is to push December prices above solid technical resistance at last week's high of US$3.37 1/2 a bushel, a technical analyst said. The next downside price objective for the bears is to push and close prices below solid technical support at the August low of US$3.11 1/2 a bushel.

 

First resistance for December corn is seen at US$3.25 and then at US$3.29. First support is seen at Wednesday's low of US$3.15 1/2 and then at US$3.11 1/2.