CBOT Corn Outlook on Wednesday: Up 2-3 cents on slow crop, outside support

 

 

Chicago Board of Trade corn futures are expected to open higher Wednesday on supportive outside markets and the sluggish harvest pace.

 

Corn is called 2 to 3 cents higher. In overnight trade, December corn was up 3 1/4 cents to US$3.85 per bushel and March corn was up 3 1/4 cents to US$3.96 1/2.

 

A weaker dollar, technical strength and worries about the crop have been a familiar recipe for gains in the market lately and should continue to set a supportive tone Wednesday, analysts said.

 

"We're at high prices after a big run, but I'm struggling to see anything that would send us lower," the trader said.

 

The weather is mostly viewed as supportive, with rains this week and a wetter forecast for the 6-to 10-day period across the U.S. corn belt. Some analysts are noting the potential for a brief dry period early next week that could allow for a little harvest progress.

 

The crop concerns were highlighted by Tuesday's weekly crop progress report from the U.S. Department of Agriculture.

 

The USDA said that 74% of the crop was mature, up from 57% the prior week but still well below the five-year average of 92%. Harvest progress barely nudged higher, to 13%, from 10% the prior week. The five-year average is 35%.

 

Illinois, which on average is 56% complete at this time of year, is only 6% complete.

 

But overall, 70% of the crop was rated good-to-excellent, same as last week and an unusually high number for this time of year.

 

Fund money is fueling the rally, and traders and analysts say that unless the pace of harvest picks up soon, the funds should continue buying.

 

The corn bulls still have solid near-term technical momentum and their next upside price objective is to push and close December prices above psychological resistance at US$4.00 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 September high of US$3.47 3/4 a bushel.

 

First resistance for December corn is seen at Tuesday's high of US$3.86 3/4 and then at US$3.90, the technical analyst said. First support is seen at US$3.75 and then at US$3.70.

 

FuturesTechs, meanwhile, said that "we see no reason why the bulls can't keep this recovery trade going, and our next targets at US$3.93, US$4.08 and US$4.50 are more than achievable in the near future."