January 2, 2008

CBOT Corn Outlook on Wednesday: Up 4-6 cents on strong e-CBOT, spillover

Chicago Board of Trade corn futures are expected to begin day time trading 4-to-6 cents higher Wednesday, boosted by spillover from surging soybean prices, good gains posted overnight and higher outside markets, analysts said.

In overnight electronic trading, March corn jumped 6 cents to US$4.61 1/2 per bushel. e-CBOT volume in March was 5,877 contracts. New life-of-contract highs were set in several contract months in the overnight session.

Corn rallied overnight and should open day session trading higher as well, a commission house analyst said. Soybeans surged and corn should draw support from its gains as well as the outside markets which are sharply higher, the analyst said. Nearby crude oil is trading nearly US$2 per barrel higher.

Speculative buying is expected to continue to support commodities in the new year and it appears that the buying started in the overnight session, a floor analyst said. In addition, weather forecasts are predicting dry weather in Argentina which should also add to the buying interest, the floor analyst said.

Long range charts covering the period of next Monday through Friday forecast a ridge over northwest and central Argentina. However, this weather pattern may result in thundershowers and cooler temperatures for the country's central agricultural belt. This is a long-range forecast and subject to significant day-to-day changes, DTN Meteorlogix Weather said.

Dry weather with only a few isolated showers is forecast for Thursday. Dry weather returns Friday with a chance for a few thundershowers Saturday. Temperatures are expected to average above normal Saturday, Meteorlogix Weather said.

In other corn news, cash corn prices in China were lower in the week ended Wednesday on increased domestic supply and after the Ministry of Commerce announced plans to limit exports of flour made from corn and other grains in an attempt to limit food inflation.

China sold over 34,000 metric tonnes of corn from state reserves Wednesday or 7% of the 500,000 tonnes it planned to sell.

Corn futures on China's Dalian Commodities Exchange settled lower with the benchmark May contract down RMB/13 at 1,682RMB/tonne.