December 10, 2008
CBOT Corn Outlook on Wednesday: Up 6-8 cents; outside support, overnight gain
Outside market strength and overnight gains are expected to send Chicago Board of Trade corn futures higher at Wednesday's open.
Corn is called 6 to 8 cents higher. In overnight trading, December corn was up 4 cents to US$3.16 1/4 per bushel, March corn was up 9 3/4 cents to US$3.37 1/2 and May corn was up 9 3/4 cents to US$3.48 1/4.
Outside markets, including crude oil, gold, silver and U.S. stocks, are all pointing higher Wednesday morning, which should push the market higher in the absence of strong fundamental news, analysts said.
With the U.S. Department of Agriculture to release new supply and demand estimates Thursday morning, upside potential could be limited, traders add. The trade expects the government to increase 2008-09 ending stocks due to decreasing demand for exports, ethanol and feed.
The report will be released Thursday at 8:30 a.m. EST.
Although some traders expected more consolidation after Tuesday's close, an analyst said overnight gains have set a different tone for Wednesday's trade.
"Expectations for any kind of limited pre-report trading kind of went by the wayside," said Jerry Gidel, analyst for North America Risk Management Services.
Traders said the report has likely already been factored in to the market. There is also less likely to be aggressive selling of corn with prices close to US$3, some traders and analysts said.
The trade will continue to eye South America weather for any potential impact on the crop there. DTN Meteorlogix said "another period of hot weather is expected later this weekend and early next week" in Argentina, which had suffered a bout of hot, dry weather but more recently had received some favorable rain.
In other news, there were 764 deliveries against the December contract.
The next downside price objective is to push and close December prices below major psychological support at US$3.00, a technical analyst said. The next upside price objective is to push and close prices above solid technical resistance at US$3.50.
First resistance for March corn is seen at Tuesday's high of US$3.36 3/4 and then at US$3.40, the technical analyst said. First support is seen at Tuesday's low of US$3.24 and then at US$3.20.