September 8, 2009

 

CBOT Corn Outlook on Tuesday: Up slightly as outside markets support

 

 

Chicago Board of Trade corn futures are expected to open up slightly Tuesday following overnight gains on supportive outside markets, traders said.

 

Corn is called steady to 2 cents higher. In overnight trade, September corn was up 1 cent to US$3.01 1/2 per bushel, December corn was up 1/4 cent to US$3.06 1/2 and March corn was up 1/4 cent to US$3.20.

 

Outside markets are providing a solid foundation Monday, analysts said, as stronger crude oil, equities and gold, as well as a weaker dollar, were all supportive overnight.

 

The corn market initially fell overnight, dipping to the contract low of US$3.02 before bouncing. Traders said the outside markets were primary driver of the rebound. Soybeans led the way higher, traders added.

 

Weather forecasts continue to show no frost in the two-week forecast, which should keep pressure on the market, traders said. But one trader said the pressure should be mitigated by rains expected later this week. The crop is behind schedule and could use warm, sunny days to reach the finish line.

 

"It's probably not the perfect situation for maturing crops," a trader said of the rain.

 

The corn bulls' next upside price objective is to push and close December prices above solid technical resistance at last week's high of US$3.32 a bushel, a technical analyst said. The next downside price objective for the bears is to push and close prices below major psychological support at US$3.00 a bushel.

 

First resistance for December corn is seen at US$3.10 and then at Friday's high of US$3.16. First support is seen at Friday's low of US$3.06 and then at the contract low of US$3.02.

 

There were 70 deliveries reported against the September futures contract Tuesday.

 

In export news, Taiwan's Maize Industry Procurement Association, formerly known as the Members Feed Industry Group, is seeking 60,000 metric tonnes of U.S.-origin corn in a tender to be completed later this week, an official said Tuesday, declining to give further details

 

Philippine President Gloria Macapagal Arroyo has ordered the Department of Agriculture to look into the possibility of exporting corn to Kenya, which is suffering through a drought, the government's chief economic planner said Tuesday. Country Hedging noted in a morning commentary that this could be the first year the Philippines is a corn exporter.

 

Also, China's imports of Distillers' Dried Grains with Solubles, a corn ethanol byproduct used for manufacturing animal feeds, have surged in recent months and could potentially reach 200,000 metric tonnes this year, from just 6,740 tonnes in 2008, analysts said Monday.