January 18, 2006

 

CBOT Corn Outlook on Wednesday: 1-2 cents lower, following weak e-CBOT trade

 

 

Corn futures at the Chicago Board of Trade are expected to begin open auction trading 1 to 2 cents lower Wednesday, keeping with the tone established in overnight electronic trading, sources said.

 

In overnight e-CBOT trading, March corn declined 2 cents to US$2.06 3/4 per bushel, May corn fell 1 3/4 cents to US$2.16 1/2, and July corn ended 2 cents lower at US$2.25 1/4.

 

The market could see some follow through selling from Tuesday, precious metals are lower and the fundamental picture is bearish, a floor analyst said.

 

In addition, soybean futures were pressured by some forecasts for some rain over the next several days in Brazil and there was a fatality in China from bird flu, he added.

 

A sixth person has died from bird flu in China, the Chinese government reported Wednesday.

 

Commodity funds are long corn on this break and a lot of today's price action will be determined by what they want to do, a commission house analyst said.

 

Scattered showers are forecast for Thursday and Friday in some sections of Argentina before drier weather returns for the weekend, DTN Meteorlogix weather said.

 

Cash corn basis bids were unchanged to mostly higher Wednesday morning. Central Illinois was unchanged at 3 cents over the March; with St. Louis was 4 cents higher, at 4 cents over the March future.

 

On technical charts, price action on Tuesday could be the beginning of a bearish downside breakout from a bearish descending triangle pattern on the daily bar chart, a market technician said. He sees first resistance for March corn at US$2.10 and then at US$2.12 3/4, Tuesday's high. Fist support is pegged at US$2.08 1/4, Tuesday's low and then at US$2.07.

 

In other corn news, cash corn prices were slightly higher in China in the week ended Wednesday as demand from corn processors helped underpin prices, sources said.

 

Processors are purchasing corn ahead of the Lunar New Year at the end of January. Corn is mainly used as feed in China.

 

Total corn production in Serbia for 2005-06 was estimated at 7.3 million metric tonnes, one million tonnes higher than last year and the highest in the past decade according to the U.S. Department of Agriculture's Foreign Agricultural Service.

 

Corn futures traded on China's Dalian Futures Exchange settled lower Wednesday on spillover selling from soybeans, sources said. The most active September contract declined RMB14, ending at RMB1,372/tonne.