October 23, 2008
CBOT Corn Outlook on Thursday: Steady to down 2 cents; lack of bullish news
Chicago Board of Trade corn futures are expected to open steady to two cents lower Thursday following overnight action as the trade struggles to find any supportive news.
In overnight trading, December corn was down 2 1/4 cents to US$3.82 3/4, March corn was flat at US$4.00 3/4 and May corn was down 5 cents to US$4.07.
Analysts said there was some short-covering early in the overnight session, but the market was unable to sustain a rally. Prices fell sharply Wednesday on the dollar and concerns about the world economy.
"There's nothing bullish in the market," said Terry Reilly, analyst with Citigroup, adding that weather and export sales have already been factored in.
Outside markets will continue to play the dominant role in the market's direction, analysts say, with a stronger U.S. dollar causing continued weakness in corn and other commodities. Any rally on Thursday would be due to outside market activity, Reilly said.
Farmers aren't selling at current prices, a trader said, which is supporting the market as basis strengthens. But there is also not much interest from buyers, analysts said.
The U.S. Department of Agriculture reported export sales of 789,600 metric tonnes for the week ended Oct. 16, within analyst estimates of 500,000 to 900,000 metric tonnes. Sales were reported at 975,200 metric tonnes the previous week.
Wet, chilly weather is delaying harvest, analysts said, and the crop still needs to dry down in many places before harvest.
The DTN Meteorlogix forecast says there are increasing disruptions and delays to the harvest this week. Rainfall in the western and central U.S. corn belt will total .20 to 1.00 inches today, with another .25 to 1.50 inches Friday in the central corn belt.
The next downside price objective is to push and close December prices below solid technical support at last week's low of US$3.71, a technical analyst said. The next upside price objective is to push and close prices above major psychological resistance at US$4.00.
First resistance for December corn is seen at US$4.00 and then at Wednesday's high of US$4.14, the analyst said. First support is seen at Wednesday's low of US$3.81 3/4 and then at US$3.71.