January 17, 2007

 

CBOT Corn Outlook on Wednesday: 3-4 cents higher; following e-CBOT

 

 

Chicago Board of Trade corn futures are predicted to begin trading 3-to-4 cents higher Wednesday, following the firm tone in overnight e-CBOT trading, sources said.

 

In overnight e-CBOT trading, March corn rose 4 cents to US$4.07 cents per bushel and May gained 4 1/4 cents to US$4.18. e-CBOT volume in March was 10,510 contracts.

 

Corn was higher on speculative buying overnight and should begin Tuesday's daytime trade higher as well, a floor analyst said. Ideas are that index funds have finished their reallocation program and have ended their selling of corn, putting the futures that make up their indices in the proper percentages for the new year, he added.

 

Nothing has changed, a commission house analyst noted. Corn production was lower than expected, ending stocks remain tight and usage of corn remains strong, a floor trader said.

 

The market has a mission to ration ending stocks and buy corn acres this spring via high prices and so far there is no indication that the market has accomplished this job yet, said Brian Hoops, president of Midwest Market Solutions in a note to clients Wednesday.

 

On day session open auction technical charts, the bulls are in firm technical command though Tuesday's price action suggests a choppy near-term trading range between Tuesdays high and solid technical support in March, a market technician said. In the near-term expect high volatility.

 

First resistance in March is seen at US$4.10 and then US$4.16 1/2. First support is seen at US$4.00 and then at US$3.96 1/2.

 

In other corn news, Philippine corn production in the first half of the year is expected to increase 7.9% from the first half of 2006 to 2.81 million tonnes, the Philippine Department of Agriculture said. Intensified planting is expected to lift production, the department's Bureau of Agricultural Statistics said.

 

China's cash corn prices were little changed in the week ended Wednesday as the strong gains in futures were shrugged off by the market, sources said.

 

Little change on the demand side of the market kept the market balanced, an analyst said.

 

Corn futures prices on China's Dalian Commodities Exchange ended lower with the most-active September contract down RMB/11 at RMB1,753/tonne.