August 27, 2009

 

CBOT Corn Outlook on Thursday: Up 1-2 cents on soybeans, cool weather

 

 

Chicago Board of Trade corn futures are expected to climb in Thursday's open on support from soybeans and cooler weather that is delaying crop development, traders said.

 

Corn is called 1 to 2 cents higher. In overnight trade, September corn was up 1 1/2 cents to US$3.22 per bushel and December corn was up 2 cents to US$3.28 1/4.

 

The market is lacking direction and is seen range-bound as traders eye weather forecasts for signs of an early frost.

 

"You've got the maturation issue underpinning it right now," a trader said.

 

The crop is well behind schedule, analysts note, and could suffer yield losses if a frost hits early. Forecasts call for temperatures well below normal through Monday.

 

"This does not mean a frost as it is too early for that, but it would mean slower development of crops for at least a few day period," DTN Meteorlogix said in a forecast.

 

Traders and analysts are noting differing views on longer-range forecasts.

 

Traders said soybeans remain the key story in the grains and oilseeds complex. Soybeans are expected to climb Thursday amid continued strong demand, and that market could drag corn with it, a trader said.

 

Outside markets appear to providing little direction, traders and analysts said.

 

The U.S. Department of Agriculture reported weekly net export sales of 973,200 metric tonnes, including 265,600 for the 2008-09 marketing year and 707,600 for the 2009-10 marketing year.

 

Analysts had expected sales between 750,000 and 1.2 million metric tonnes. Sales the previous week were 1.436 million tonnes. A trader called this week's sales "mediocre."

 

End-of-month positioning could affect the market the next couple of days, traders and analysts said.

 

The corn bulls' next upside price objective is to push December prices above solid technical resistance at US$3.50 a bushel, a technical analyst said. The next downside price objective for the bears is to push and close prices below solid technical support at last week's low of US$3.11 1/2 a bushel.

 

First resistance for December corn is seen at today's high of US$3.30 and then at this week's high of US$3.37 1/2. First support is seen at this week's low of US$3.22 1/2 and then at US$3.20.

 

In international news, the Chinese government will allocate 5.77 million metric tonnes of corn from its reserves to be sold to industrial processors in major producing areas of the north and northeast, an official at a local grain administration said Thursday.