November 4, 2008
CBOT Corn Outlook on Tuesday: 4-6 cents higher on weak dollar, firm crude
U.S. corn futures are expected to open 4-6 cents a bushel higher following the lead of a weak dollar and firmness in key markets such as crude oil and a higher open on Wall Street, traders said Tuesday.
The market is also expected to see follow-through buying from modest gains posted Monday in consolidation-type trade.
The Chicago Board of Trade grain and soybean complex was mostly higher overnight, as December corn rose 3 1/2 cents to US$4.06 1/2 a bushel.
One trader said the markets may remain subdued, as they were Monday, as people go to the polls on Election Day and the markets wait to see who will become the next president of the U.S.
The corn harvest was 55% complete as of Sunday, up from 39% the previous week but down from the 79% five-year average, the U.S. Agriculture Department reported Monday afternoon. The data was in-line with analysts' expectations of 56% complete.
While the harvest continues to significantly lag the five-year average, many farmers have had no choice because of the wet fall and they are leaving the corn to dry in the fields rather than incurring steep drying costs at the elevator.
"Iowa had a big corn harvest week, taking out 23% of the crop, and we should have a good running until the rain arrives in the middle of the week," a southern Iowa corn processor said.
While the weather conditions allowed farmers to complete the soybean harvest, the emphasis is now on corn, which is beginning to dry down in the field - "and it's about time," he said.
Top grower Iowa's harvest was just 43% complete as of Sunday, compared to its 79% average. The Illinois harvest was pegged at 66% finished, down from its average of 92 percent.
The warm, dry weather that has enveloped the Midwest the last several days will be coming to an end Wednesday and Thursday, as wetter and cooler conditions will likely continue for the next six to 10 days, DTN Meteorlogix said. Showers are forecast Wednesday, with snow or rain showers possible Thursday.
Temperatures will continue to average well above normal Tuesday and Wednesday, falling to near to below normal in the west on Thursday and above normal in the eastern Midwest. By Saturday and Sunday, below-normal readings will cover the entire Midwest, Meteorlogix said.
The next objective for bulls is to push and close prices above technical resistance at last week's high of US$4.33 on December corn, while bears downside price objective is to press prices down to technical support at the US$3.64 October low, a technical analyst said.
Nearby resistance on December is seen at US$4.10, then US$4.18, while support is uncovered at US$4, then at US$3.94 1/2 a bushel.