December 4, 2009

 

CBOT Corn Outlook on Friday: Seen mixed, eyeing outside markets

 

 

Chicago Board of Trade corn futures are expected to open mixed Friday, with traders eyeing outside markets and prices feeling some technical pressure after a weak close Thursday, analysts said.

 

In overnight electronic trading, March corn slipped 1/2 cent to US$4.00 1/4 per bushel.

 

Strength in the U.S. dollar and weakness in gold are bearish for the grains, analysts said. Spot gold tumbled following much better-than-expected U.S. jobs data, as the dollar strengthened on signs of an improving economy. Crude oil, meanwhile, was rising.

 

The jobs report showed U.S. employers cut 11,000 non-farm jobs in November, compared with an expected drop of 125,000 and following a revised reduction of 111,000 jobs in October. The unemployment rate was unchanged at a 26-year high of 10.2% from October.

 

"It's going to be an interesting day technically and fundamentally today," according to a note from Global Commodity Analytics & Consulting. "We may have strong weekly closing sell signals in the commodities sector if the current price action in pre-market trade/outside markets isn't reversed, in the gold in particular."

 

CBOT corn is heading into Friday's day session following a "poor technical close" Thursday, said Don Roose, president of U.S. Commodities. December corn Thursday ended down 8 cents at US$3.91 3/4, and March corn ended down 8 cents at US$4.06 1/2.

 

Bulls' next upside price objective is to push and close March corn above solid technical resistance at the November high of US$4.25, a technical analyst said. The next downside price objective for the bears is to push and close prices below solid technical support at last week's low of US$3.90 1/4, he said.

 

First resistance for March corn is seen at US$4.05 and then at US$4.10, the technical analyst said. First support is seen at US$4.00 and then at US$3.95, he said.

 

"End-of-the-week selling, that should be the bias here," Roose said.

 

There is a lack of fresh fundamental news for the market, and export demand continues to look lackluster, traders said. The U.S. Department of Agriculture said Thursday that weekly U.S. corn export sales were 659,000 tonnes, within trade expectations of 400,000 tonnes to 900,000 tonnes. The sales were down 46% from the previous week and unchanged from the prior four-week average, according to the USDA.

 

"If your export pace is robust, then you're competing in the world market," Roose said. "Our export pace continues to be slow."