December 22, 2009

 

CBOT Corn Outlook on Tuesday: Mixed in light trade; near key support

 

 

Chicago Board of Trade corn futures are expected to open mixed Tuesday following low-volume overnight trade as bulls try to keep the market above technical and psychological support levels.

 

In overnight trade, March corn was down 1/4 cent to US$3.99 3/4 per bushel and May corn was up 1/2 cent to US$4.11 1/4.

 

Light holiday trade is expected to continue Tuesday, with low volumes that could allow for sudden price swings, traders say. Traders add that there is little fundamental news and not much direction from the outside markets.

 

In addition to hovering near the US$4 mark, which some traders see as psychologically important, the market is also right around several key moving averages, including the 10-day, 20-day, 50-day and 200-day.

 

Demand is generally seen as weak and limiting the market's upside, although there was some supportive news Tuesday, as private exporters reported to the U.S. Department of Agriculture export sales of 176,000 metric tonnes of corn for delivery to Mexico during the 2009/2010 marketing year, the USDA said.

 

The market traded in a very tight range overnight. It "needs some help from some price friendly news or support from the funds to hold higher," Farm Futures said in a morning commentary.

 

Mark Gold, managing partner for Top Third Ag Marketing, said in a commentary that the market "has held up well in (the) face of some bearish inputs," noting specifically Informa Economics' projection on Friday that corn acres would increase by 3.1 million in 2010.

 

Both corn and wheat have seen a little strength near the end of the past few sessions, a floor trader said. He said that could be a result of index fund rebalancing, which is expected around the start of the new year and is seen as a supportive factor for corn.

 

"It's keeping people reluctant to push this thing too hard," he said.

 

Bulls' next upside price objective is to push and close prices above strong technical resistance at last week's high of US$4.13 3/4 a bushel. The next downside price objective for the bears is to push and close prices below solid technical support at US$3.90 a bushel.

 

First resistance for March corn is seen at Monday's high of US$4.06 3/4 and then at US$4.10. First support is seen at Monday's low of US$3.95 3/4 and then at US$3.93 1/4.