December 1, 2008
CBOT Corn Outlook on Monday: Down 4-6 cents on bearish outside market influence
Chicago Board of Trade corn futures are poised for a lower start to Monday's day session, pressured by the bearish impact of outside market action in the absence of fresh fundamental directive news.
Analysts expect corn to open 4 cents to 6 cents lower.
In overnight electronic trading, December corn was 5 1/2 cents lower at US$3.44, and March corn was 5 3/4 cents lower at US$3.60.
The influence of sharply lower crude oil and precious metal futures amid strength in the U.S. dollar is expected to apply pressure to prices in early action, analysts said.
Deleveraging in commodities is seen as a feature amid broad based weakness across the asset class, with fundamentally needed rain in dry areas of Argentina expected add to the lower price theme, analysts added.
Otherwise, a quiet news front is seen keeping traders eyeing outside markets, with weakness in equities extending fears of a global economic slow down.
Meanwhile, the ethanol industry is having its economic woes and an abundance of cheaper feed-quality wheat has dampened demand for corn, analysts said.
A technical analyst said corn prices are still trading below a five-month-old downtrend line on the daily bar chart, with the next downside price objective for March corn is to push and close prices below solid technical support at the contract low of US$3.52 1/4. The next upside price objective is to push and close prices above psychological resistance at US$4.00.
First resistance for March corn is seen at Friday's high of US$3.75 3/4 and then at last week's high of US$3.77 3/4. First support is seen at Friday's low of US$3.62 1/4 and then at US$3.52 1/4. The DTN Meteorlogix weather forecast said rain and storms in the Argentine row crop region late last week and early in the weekend greatly improved soil moisture and eased stress to crops, especially after recent very hot weather.
December corn deliveries totaled 1,600 lots. Issuers and stoppers were scattered among various commission houses. The last trade date assigned was November 21.
On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report Monday at 11 a.m., EST.