December 15, 2008
Corn prices may remain well-supported this week as demand emerges for the yellow grain at current prices, with market participants postulating that Chicago Board of Trade corn futures may have bottomed out.
Friday, there was a flux of bullish news for corn futures, as export demand figures for U.S. corn were robust, while early projections showed U.S. corn acreage in 2009 could be lower on year.
Alaron Securities analyst Tim Hannagan said that the U.S. sold 928,000 metric tonnes of corn in the first week of December, the latest week for which data is available, 200% higher than the four-week average.
Asian importers bought 365,000 tonnes of U.S. corn in the first week of this month, up from 101,000 tonnes in the preceding week.
"This is one week that suggests they (importers) are back," Hannagan said.
He added that if the current support level of US$3.42/bushel on the CBOT March corn contract holds this week, there may be a key reversal from technical bear market to bull market.
In Monday's electronic trade, CBOT grains futures were higher, tracking other commodities and rallying Asian stock markets.
At 0623 GMT, March the corn contract was trading 12.4 cents higher at US$3.86/bushel.
January soybeans were up 11 cents at US$8.65/bushel, while March wheat was 13 cents higher at US$5.26/bushel.
In other news, India's 2009 wheat harvest, expected in March and April, may hit an all-time high of 80 million tonnes, farm scientist M.S. Swaminathan told Dow Jones.
At a time when pretty much every major wheat growing country has harvested or is in the process of harvesting a large crop, a bumper Indian harvest would add more pressure to global wheat prices, especially if India decides to resume exporting wheat, which it hasn't done the past few years.