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NEAR-TERM MARKET FUNDAMENTALS: The corn market traded lower overnight with late losses that largely paralleled a move upward in the dollar index. This followed a day of seesaw action yesterday with a general downward trend. Traders said that moderate fund buying yesterday helped to support the market early, but this evaporated later in the day. Weather forecasts remain dry into Saturday in most corn growing areas, although more rain is expected to push into the SW Corn Belt starting on Sunday and then into central Illinois to start next week. Amounts are not expected to be as heavy as recent systems, and these rains are expected to become lighter and scattered as they push east later next week. China’s government think tank, CNGOIC, left its estimate of their 2009 corn crop unchanged yesterday at 163.00 million tonnes. This was down from 165.92 in 2008. Basis levels notched upward at the Gulf so far this week, with a minor downtrend seen in central Illinois. The USDA will issue its latest Export Sales report on Friday this week, one day late due to the Veteran’s Day holiday.
TODAY’S GUIDANCE: The failure to accelerate to the upside in corn yesterday may keep buyers on the sidelines through the end of the week, and possibly longer. Signs of stabilization in the dollar, however temporary, could cause funds and individual investors to also take a wait and see attitude in terms of buying commodities for the short term. However, all of this could change very quickly if importers start to accelerate their buying of US corn. Another run of wet weather or a resumption of the downtrend in the dollar could also bring a fresh wave of buying, but until that happens, corn could sag back lower in the trading range to the 360 to 370 area in the December contract. We could even set back to the 100-day moving average which currently stands near 348 3/4. First support is at 380 to 382 in the December contract and then near 370 to 375. Resistance is now at 400, then 405 and 427 1/2.
