January 3, 2008

 

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

 

 

Chicago Board of Trade corn futures are forecast to begin day session trading 4-to-6 cents higher Thursday, underpinned by follow through buying from the overnight session and Wednesday's rally to 12-year highs, analysts said.

 

In overnight electronic trading, March corn rose 4 1/2 cents to US$4.67 per bushel. e-CBOT volume in March was 5,919 contracts.

 

The market should begin trading higher based on the strength in the overnight market as well as the strong gains seen in Wednesday's session, an analyst said.

 

Speculative fund traders continue to pump money into commodities and corn is benefiting from the buying interest, the analyst said.

 

Wheat futures are expected to open 20-25 cents higher on the strength in the overnight session and an increase in world demand for wheat which may provide additional support to corn prices, the analyst added.

 

Outside markets were higher in overnight activity and should provide some underlying support though gains have been trimmed since then, a floor trader said. In addition, it remains dry in Argentina which is a major corn exporter, the trader added.

 

Dry weather with only a few isolated showers are forecast for Argentina Thursday with mainly dry weather expected Friday and Saturday, DTN Meteorlogix Weather said. Temperatures are expected to average near-to-above normal Friday with hot temperatures expected in the west on Saturday and cooler in eastern sections, Meteorlogix Weather said.

 

On daily technical charts, March corn gapped open higher Wednesday, reached a fresh contract and 12-year high before backing off to close nearer the session low, a technical analyst said. Fund buying, higher outside markets and a weaker U.S. dollar supported prices and corn bulls are still very powerful technically, the analyst said. The next upside price objective is to close prices above major psychological resistance at US$5.00 per bushel. The next downside objective is to push prices below solid support at US$4.39.

 

First resistance for March corn is seen at US$4.69 1/2, the contract high and then at US$4.75. First support is seen at US$4.60, Wednesday's low and then at US$4.56 3/4, which is the bottom of Wednesday's upside price gap on the daily open auction chart.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled mostly higher with the benchmark May contract up RMB/3 at 1,685RMB/tonne.

 

The weekly U.S. export sales report, normally due out on Thursday will be delayed until Friday due to the New Year holiday.