December 4, 2008

 

CBOT Corn Outlook on Thursday: Lower; lacks fresh fundamental support

 

 

Chicago Board of Trade corn futures are expected to start Thursday's day session lower, continuing the overnight theme on outside market influences and a lack of fresh fundamental support.

 

Analysts expect corn to open 2 cents to 3 cents lower.

 

In overnight electronic trading, December corn was 3 cents lower at US$3.29, and March corn was 2 1/4 cents lower at US$3.46.

 

Global economic turmoil remains a bearish influence on market direction, with lower crude oil, equities and a firmer U.S. dollar serving as catalysts to keep buyers on the defensive, analysts said.

 

The market lacks fresh fundamental support to buoy prices, with lagging export demand and technical pressure adding to the lower tone, a CBOT floor analyst said.

 

Otherwise, traders anticipate another choppy session, with traders keeping an eye on movements in outside markets, as the absence of market moving news fails to inspire traders to take an aggressive stance in the market, analysts added.

 

A technical analyst said the next downside price objective for March corn is to push and close prices below solid technical support at US$3.25. The next upside price objective is to push and close prices above solid technical resistance at last week's high of US$3.77 3/4.

 

First resistance for March corn is expected to be at US$3.50 and then at Wednesday's high of US$3.54 1/2. First support is seen at Wednesday's low and the contract low of US$3.45 and then at US$3.40.

 

U.S. Department of Agriculture reported total weekly corn export sales were a net 392,000 metric tonnes for the week ended Nov. 27. Sales for the 2008-09 marketing year totaled 387,000 tonnes, down 17% from the prior week and 10% below the prior four-week average. Analysts had forecast sales between 350,000 and 550,000 metric tonnes. The primary buyers were Egypt with 120,000 metric tonnes and Taiwan with 61,700 tonnes.

 

USDA announced Thursday private export sales of 125,000 metric tonnes of U.S. corn for delivery to Mexico in the 2008-09 marketing year. The DTN Meteorlogix weather forecast said drier weather in Argentina during the next five to seven days looks to deplete soil moisture for developing crops, after last week's beneficial rains.

 

December corn deliveries totaled 1,647 lots. Issuers and stoppers were scattered among various commission houses. The last trade date assigned was Dec. 3.

 

In other news, Zambia will run out of corn, the staple food for its 12 million people, in February next year due to insufficient production during the 2007-08 season, the Times of Zambia reports Thursday. The country will run out of corn at the end of February and there will be a need to import to cover the shortfall which is expected to last until May, chief government spokesman Ronnie Shikapwasha was quoted as saying.