November 20, 2008
CBOT Corn Outlook on Thursday: Down 8-10 cents as financial crisis persists
Chicago Board of Trade corn futures are expected to open weaker Thursday as continuing pessimism about the U.S. economy and falling equities weigh on the market.
Corn is called 8-to-10 cents lower. In overnight trading, December corn was down 8 cents to US$3.70 3/4 per bushel and March corn was down 8 1/2 cents to US$3.86 3/4.
Outside markets have applied continuous pressure on the market in recent days. U.S. stocks dropped even further after the grains markets closed Wednesday, and are expected to fall again Thursday.
Corn has held above its seasonal low of US$3.60 1/4 in the December contract set last week, but a floor trader said he wasn't sure how long that will last given crude oil is scraping US$50 per barrel.
"I don't know how long corn can weather crude that continues to seek out new lows," he said.
Demand remains very weak, analysts said. The U.S. Department of Agriculture reported net export sales of 433,800 metric tonnes for the week ended Nov. 13, in line with analyst expectations of between 350,000 and 550,000 metric tonnes. Sales were 357,800 metric tonnes the prior week.
The domestic demand outlook is also gloomy, a trader added, with little positive news in beef, poultry or ethanol.
"You need to find a price in corn that stimulates demand," the trader said.
Although some analysts have said the slow pace of the U.S. harvest has been supportive, others point to good harvest weather currently in much of the corn belt.
The next downside price objective is to push and close prices below solid technical support at last week's low of US$3.60 1/4, a technical analyst said. The next upside price objective is to push and close prices above psychological resistance at US$4.00.
First resistance for December corn is seen at Wednesday's high of US$3.85 and then at this week's high of US$3.89 1/2 and then at US$4.00, the technical analyst said. First support is seen at Wednesday's low of US$3.75 and then at US$3.70.
