July 31, 2008

 

CBOT Corn Outlook on Thursday: Lower on lack of fresh fundamental news

 

 

Chicago Board of Trade corn futures are expected to open lower Thursday on a lack of fresh fundamental news necessary to sustain Wednesday's rally, traders and analysts said.

 

Corn is called 3 to 5 cents lower. In overnight trading, September corn was down 5 1/2 cents to US$5.96, December corn was down 5 cents to US$6.16 1/4 and March was down 5 1/4 cents to US$6.36.

 

The market had rallied Wednesday, with September corn closing up 7 1/2 cents to US$6.01 1/2 per bushel.

 

"It got overdone yesterday," a trader said. "There's not really enough news to really keep it going."

 

There is also a possibility that there will be "some liquidation after the big pop yesterday," the trader said.

 

With a lack of any fresh fundamental news, the market will be extra sensitive to crude oil prices, which helped sustain Wednesday's rally by closing more than US$4 higher, an analyst said.

 

At the same time, uncertainty over weekend weather across the U.S. corn belt is tempering gains while still stunting a steep decline, traders and analysts said.

 

"Whether it (the weather) is going to be a negative or positive factor, remains to be seen," an analyst said.

 

The DTN Meteorlogix forecast calls for mostly dry conditions in the north and west Thursday with scattered showers and thunderstorms across the southern portion of the region. Some scattered showers and thunderstorms may track into the north and west of the corn belt by Friday.

 

Mostly dry conditions will prevail throughout the weekend with above-normal temperatures arriving Saturday across the entire corn belt and persisting across the western half of the region through Monday.

 

The market could react to the prospect that the "heat is staying out west" for the most part, a trader said. This could ultimately be slightly bearish, he added.

 

The next upside price objective is to push and close December prices above solid technical resistance at US$6.30, a technical analyst said. The next downside price objective is to push and close December prices below solid technical support at US$6.00.

 

First resistance for December corn is seen at Wednesday's high of US$6.24 3/4 and then at US$6.30. First support is seen at US$6.10 and then at Wednesday's low of US$6.06 1/4.
   

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