January 4, 2007

 

CBOT Corn Outlook on Thursday: 4-5 cents lower start on follow through

 

 

Chicago Board of Trade corn futures are expected to begin trading 4-to-5 cents lower Thursday, following the tone set in overnight trading and on follow through from Wednesday's sharp losses, sources said.

 

In overnight e-CBOT trading, March corn fell 4 1/2 cents to US$3.66 per bushel and May dropped 5 cents to US$3.75. e-CBOT volume in March was 9,324 contracts.

 

The market was weaker in overnight trade and should start out lower on follow through from Wednesday's broad commodity market sell-off, a floor analyst said.

 

The funds are at record longs ahead of next week's crop report and are taking some profits ahead of it, he added.

 

The lack of fresh news is also not supportive for prices and technically the market is weak, he noted.

 

On day session open auction technical charts, March corn gapped open lower as profit taking pressure from recent gains was seen, a technical analyst said. No serious chart damage occurred to suggest a market top is in place but additional selling this week could suggest a near-term top has been reached, he added.

 

The bulls' next upside objective is to fill Wednesday's downside price gap with the bears' near-term downside price goal closing prices below the December low of US$3.62, the technician said.

 

First resistance for March corn is seen at US$3.75 and then at US$3.80, with first support at US$3.70 and then at US$3.65.

 

Cash corn basis bids were mixed Thursday. Central Illinois was unchanged at 5 cents under March.

 

In other corn news, the U. S. Department of Agriculture announced that 410,000 metric tonnes of U.S. corn been sold to Mexico. The USDA also announced that 120,000 metric tonnes of U.S. corn had been sold to Egypt for delivery in the 2006-07 crop year.

 

Corn futures on China's Dalian Commodity Exchange settled lower as long liquidation and spillover selling from lower prices at the CBOT pressured prices, analysts said. The most active September contract declined RMB48 to end at RMB1,677.

 

The weekly export sales report normally due out on Thursday will be released Friday, due to the holiday.