November 25, 2009

 

CBOT Corn Outlook on Wednesday: Higher on dollar, stalled harvest

 

 

Chicago Board of Trade corn futures are poised to open higher Wednesday thanks to a weaker dollar and continued delays for farmers still trying to harvest.

 

Corn is called 5 cents to 7 cents higher. In overnight trade, December corn was up 7 3/4 cents to US$3.83 3/4 per bushel and March corn was up 7 1/2 cents to US$3.99 1/2.

 

There's not much fundamental news for the market to digest, said Shawn McCambridge, senior grains analyst with Prudential Bache. "Today is going to be an outside (market) day," he said.

 

With the dollar sinking to new lows and gold setting a new high, the stage is set for corn to climb, McCambridge and others said.

 

Damp weather in the U.S. corn belt has continued to stall the harvest this week. T-storm Weather meteorologist Mike Tannura noted in a Wednesday outlook that rain swept across the corn belt during the past 24 hours.

 

"While unhelpful for areas with unharvested crops, it was particularly unhelpful in near-central Illinois since rainfall last week exceeded 1 (inch)," Tannura said.

 

A colder, but drier pattern should emerge next week, he said. McCambridge noted the continued harvest delays but said it should not be a major factor in trade, as "we've been talking about that for quite some time."

 

Activity could be muted Wednesday ahead of Thursday's Thanksgiving holiday. The market will be closed Thursday and re-open Friday.

 

Prices on Tuesday dropped more than a dime, marking the sixth straight day that corn prices fell.

 

A technical analyst said serious near-term chart damage was inflicted Tuesday, and a "bearish double-top reversal pattern could be forming on the daily bar chart."

 

The bulls' next upside price objective is to push and close March prices above solid technical resistance at the November high of US$4.25 a bushel, the technical analyst said. The next downside price objective for the bears is to push and close prices below solid technical support at the November low of US$3.72 1/2 a bushel.

 

First resistance for March corn is seen at US$4.00 and then at Tuesday's high of US$4.03 1/4. First support is seen at Tuesday's low of US$3.90 1/4 and then at US$3.85.