November 18, 2008
CBOT Corn Outlook on Tuesday: Down 3-5 cents; overnight losses, crisis weigh
Chicago Board of Trade corn futures are expected to open slightly lower Tuesday on overnight losses and continuing economic gloom that is weighing on demand expectations, traders said.
Corn is called 3 cents to 5 cents lower. In overnight trading, December corn was down 5 cents to US$3.80 3/4 per bushel and March corn was down 5 cents to US$3.98.
Traders said the outside markets added pressure overnight but were a mixed influence Tuesday morning. One trader said U.S. stocks have neared their low during the current financial crisis, and that a break below that will weigh on corn and other markets.
There is little news in the corn market, although the slow pace of harvest continues. This, analysts say, is offering support as concerns rise about the crop being left in the field. The U.S. corn harvest was 78% complete as of Sunday, up from 71% last week but down from the five-year average of 94%, the USDA said Monday. Analysts had expected the completed harvest to exceed 80%.
Several states, including Nebraska, South Dakota, North Dakota, Iowa and Wisconsin, still have at least 30% of the crop remaining in the field. Analysts say the longer the crop remains in the field, the greater the chance of a wet snow storm knocking it down and making it difficult or impossible to harvest.
"There's still quite a bit of corn out there. We're concerned about that," a floor trader said.
The good news for producers is that weather during the next several days will aid harvest efforts. DTN Meteorlogix says conditions will be cold and dry into the weekend.
December options expire on Friday, and that might be lending underlying support "as traders adjust positions for the expiration," Benson Quinn Commodities analyst Jon Michalscheck said in a market commentary.
Corn could also get spillover support from soybeans, which unlike corn has seen strong demand, a trader said. Corn demand remains very poor, analysts said.
In export news, Country Hedging said India's corn exports are expected to fall to 200,000 metric tonnes from 3 million metric tonnes last year.
The next downside price objective is to push and close prices below solid technical support at last week's low of US$3.60 1/4, a technical analyst said. The next upside price objective is to push and close prices above psychological resistance at US$4.00.
First resistance for December corn is seen at Monday's high of US$3.89 1/2 and then at US$4.00, the technical analyst said. First support is seen at US$3.80 and then at Monday's low of US$3.75.