CBOT Corn Outlook: Up 3-5c On Dollar, Slow Crop Progress

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

CHICAGO (Dow Jones)-- U.S. corn futures are expected to open higher Tuesday as supportive outside markets and disappointing weekly crop progress estimates set the stage for prices to rebound.

Chicago Board of Trade corn is called 3 to 5 cents higher. In overnight trade, July corn was up 4 1/4 cents to $3.60 1/4 per bushel and September corn was up 4 1/2 cents to$3.68 1/2.

A weaker dollar and stronger crude oil should support corn and commodities generally, analysts said. Those markets had been bearish Monday, as investors moved money out of commodities amid the stronger dollar.

The U.S. Department of Agriculture's crop progress estimates released Monday afternoon were considered supportive. The USDA said 67% of corn was in good-to-excellent condition as of Sunday, toward the low end of market expectations of 66% to 72%. Several analysts had expected the rating to be above 70% after warm, dry weather earlier in the season allowed farmers to plant the crop quickly.

Planting progress, while still ahead of schedule, was a little slower than expected in the previous week. Corn was 87% planted, up from 81% a week ago and the average of 78% for this time of year.

Jason Britt, president of Central State Commodities, added that he is hearing from many customers that they are having to replant crops after recent excessive rains. That is adding some underlying support he said, although he also noted there is still enough time in the season to plant and end up with a good crop.

But weather forecasts call for favorable crop conditions into early next week, analysts said.

Serious near-term technical damage has been inflicted in corn just recently, technical analyst Jim Wyckoff said. Prices are back near the April low.

The next downside price objective for the bears is to push and close prices below solid technical support at the April low of $3.51 1/2, Wyckoff said. Bulls' next upside price objective is to push and close prices above solid technical resistance at $3.70 a bushel.

First resistance for July corn is seen at $3.60 and then at Monday's high of $3.64 1/2, the technical analyst said. First support is seen at Monday's low of $3.55 1/2 and then at $3.51 1/2.

Optimism about increased Chinese demand for U.S. corn continues to underpin the market.

China's state-run Cofco Ltd. may import more corn if local prices remain high, as it has already obtained a quota from the government to buy up to 500,000 metric tons, a person familiar with the developments said Tuesday.

The country's corn output fell to 155 million tons in 2009-10 from 166 million tons a year earlier due to a drought, and there are worries that ongoing delayed planting may affect the next crop as well.

Britt said that with the China demand and the fact it is still early in the growing season, "support is going to be awful good around that $3.50 area" in the July contract.

In other export news, the Korea Feed Association Tuesday passed on a tender to import 55,000 metric tons each of corn, soymeal and feed wheat, citing high prices, trading executives said.


(Sameer Mohindru contributed to this report.)

-By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com




Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left


Farmall® C

From the feedlot to the pasture, the Case IH Farmall® C series tractors help you do more. Available in a range ... Read More

View all Products in this segment

View All Buyers Guides

)
Feedback Form
Leads to Insight