December 11, 2009

 

CBOT Corn Outlook on Friday: Seen up 2-4 cents on follow-through buying

 

 

Follow-through technical buying is expected to lift Chicago Board of Trade corn futures 2 to 4 cents per bushel higher early Friday after a firm close Thursday.

 

In overnight electronic trading, CBOT March corn ended up 3 3/4 cents to US$3.96 3/4.

 

Corn is finding strength from ideas that the market "has gotten a little oversold," Summit Commodity Brokerage said in a market comment. There is a lack of fresh fundamental news out, and weak demand should "eventually limit any significant rallies," it said.

 

Bulls' next upside price objective is to push and close March corn above major psychological resistance at US$4.00, a technical analyst said. The next downside price objective for the bears is to push and close prices below solid technical support at this week's low of US$3.79, he said.

 

Resistance for March corn is seen at US$4.00. First support is seen at US$3.90 and then at US$3.85, the analyst said.

 

Commodity funds were strong buyers Thursday and "continued buying corn overnight, with the outside markets providing support," Country Hedging said in a note. Corn should feel additional support from harvest delays due to snow that recently hit growing areas in the U.S. Midwest, the firm said.

 

Wet weather slowed harvest throughout the fall, but the recent snowfall raised new fears of crop losses, traders said. Some traders downplayed the concerns and noted the U.S. was still on track to produce a big crop.

 

Harvest should be 90% to 93% complete in the U.S. Department of Agriculture's weekly crop progress report, due out at 4 p.m. EST Monday, AgResource Company said. As of Sunday, harvest was 88% complete, according to the USDA.

 

"Over 10% of the nation's corn crop has been left out in the field, covered to a very great extent by snow, with some of that crop blown down and thus lost," said Dennis Gartman, publisher of the Gartman Letter.

 

Drier weather that is returning to the central U.S. should "aid the 2009 U.S. corn harvest as combines return to the fields," according to AgResource. Private weather firm DTN Meteorlogix agreed that "conditions across the Midwest region should slowly improve during the coming days as drier weather dominates" the forecast. The weather firm warned that "areas with deep snow cover will not be doing any field work for some time."