CHICAGO (Dow Jones)--Chicago Board of Trade corn futures are expected to dip slightly on Wednesday's open after the recent technical rebound lost steam overnight.
Corn is called 1 to 2 cents lower. In overnight trade, March corn was down 1 3/4 cents to $3.63 1/4 per bushel and May corn was down 1 3/4 cents to $3.74 1/2.
Traders said prices were firm for much of the overnight trade, topping Tuesday's highs, but slipped late and ended near session lows. Outside macro markets, such as crude oil and the dollar, weighed on prices late in the overnight session, they said.
The market could remain tethered to the outside markets Wednesday in the absence of fundamental news, traders said. Gains Monday and Tuesday were mostly attributed to a technical bounce.
"Fundamentally, there are major questions about the sustainability of this recovery," a trader said.
Large crops, both in the U.S. and South America, and unspectacular demand are the key bearish features.
Benson Quinn Commodities analyst Jon Michalscheck said in a commentary that with March options expiring Feb. 19, bulls could build a case for the market to retrace recent losses back to the $3.80 or $3.85 area, "but without a bullish fundamental change to grains and/or the energy complex, I would expect the above mentioned level to provide some formidable resistance."
A lack of farmer selling has underpinned prices, traders say. But they also note quality problems which could emerge once the weather begins to warm up, and said that has led to increased selling of the nearby March futures contract.
Corn bears still have the near-term technical advantage, a technical analyst said. The next downside price objective for the bears is to push and close prices below solid technical support at last week's low of $3.55 1/4 a bushel, he said. The next upside price objective is to push prices above solid technical resistance at $3.73 a bushel.
First resistance for March corn is seen at Tuesday's high of $3.67 1/4 and then at $3.70, the technical analyst said. First support is seen at $3.63 1/2 and then at $3.60.
Traders will be watching Wednesday for world crop estimates from a private firm, and for the possible release of the new Renewable Fuels Standard mandate from the government.
-By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com
(END) Dow Jones Newswires
02-03-10 0923ET
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