September 29, 2009
CBOT Corn Outlook on Tuesday: Up 2-4 cents on cold corn belt weather
Chicago Board of Trade corn futures are poised to open higher Tuesday on anxiety about weather damage to the crop.
Corn is called 2 to 4 cents higher. In overnight trade, December corn was up 3 1/2 cents to US$3.42 1/4 per bushel and March corn was up 4 1/4 cents to US$3.55 1/2.
Cold weather hit parts of the northwest corn belt overnight, with temperatures dipping into the low 30s or even upper 20s in parts of the Dakotas, Nebraska and western Minnesota. That is stoking fears about frost damage.
"I think (corn) is getting almost all of its support from the weather right now," said Mike Zuzolo, president of Global Commodity Analytics and Consulting.
DTN Meteorlogix said in a Tuesday forecast that "we may also see a little frost tonight or tomorrow night in parts of the north and northeast Midwest."
Analysts are also noting plenty of wet weather across the corn belt, which is likely to delay harvest and stall late maturation. The late pace of the crop has left the crop vulnerable to frost or a freeze, traders said.
The U.S. corn harvest was 6% complete as of Sunday, down from 8% last year and the average of 18%, the U.S. Department of Agriculture said in Monday's weekly crop progress report. That was generally in line with expectations.
Field work had just begun in key Midwestern states, with 2% harvested in Illinois, Indiana and Iowa, the USDA said. On average, harvest at this point would be 28% complete in Illinois, 15% complete in Indiana and 6% complete in Iowa.
The portion of the crop rated good-to-excellent held steady at 68%.
Outside markets could limit the market's upside potential Tuesday, as firmness in the dollar pressures crude oil and by extension corn, analysts said.
Zuzolo said the market could be in a strong position technically, and that an open above the weekly high of US$3.40 3/4 per bushel could send the market toward resistance at US$3.47 3/4 per bushel.
The next upside price objective is to push December prices above solid technical resistance at the September high of US$3.47 3/4 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 US$3.20 a bushel.
First resistance for December corn is seen at Monday's and last week's high of US$3.40 3/4 and then at US$3.45, the technical analyst said. First support is seen at US$3.35 and then at Monday's low of US$3.29.