December 24, 2009

 

CBOT Corn Outlook on Thursday: Mixed; export sales surge

 

 

Chicago Board of Trade corn futures are expected to open mixed Thursday in an abbreviated session before the Christmas holiday.

 

Corn is called steady to 2 cents higher. In overnight trading, March corn was up 3/4 cent to US$4.05 1/2 per bushel and May corn was up 1 cent to 44.16 1/4.

 

The market inched higher overnight amid support from modestly higher crude oil and a weaker dollar, traders and analysts said.

 

Corn could get an additional boost from very strong weekly export sales reported Thursday. The U.S. Department of Agriculture reported net sales of 1.592 million metric tonnes, a marketing year high and up 30% from last week's strong sales. The sales were up 61% from the prior 4-week average.

 

The biggest increases were for Mexico (553,600 metric tonnes) and Japan (487,900 metric tonnes).

 

Analysts had been expecting sales between 550,000 and 750,000 tonnes.

 

The market, which has been hovering around the 10-day, 20-day, 50-day and 200-day moving averages in the March contract recently, is currently above all of them. The market is seen as rangebound, although some analysts say that prospect of index fund rebalancing to start the new year and the need for corn prices to encourage more planted acres in 2010 could give the market a lift to the upper end of the range.

 

Technical analyst Jim Wyckoff said prices "are still in a choppy trading range," bound by support at the November low of US$3.72 1/2 per bushel and solid resistance at the November high of US$4.25.

 

The 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, Wyckoff said. 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 Wednesday's high of US$4.05 1/4 and then at this week's high of US$4.06 1/2, Wyckoff said. First support is seen at US$4.00 and then at Wednesday's low of US$3.97 1/4.

 

The market closes early at 1p.m. EST, and will be closed on Friday for the Christmas holiday. Trade will likely be light Thursday, but could pick up next week, a trader said.