January 23, 2008

 

CBOT Corn Outlook on Wednesday: Down 3-5 cents on outside markets, weak overnight trade

 

 

Chicago Board of Trade corn futures are predicted to start day time trading 3 to 5 cents lower Wednesday as lower outside markets and weaker prices in the overnight session are expected to weigh on values at the opening, analysts said.

 

In overnight electronic trading, March corn fell 4 3/4 cents to US$4.84 1/4 per bushel. Electronic trading volume in March was 8,952 contracts.

 

Corn should open lower on the weakness in overnight trading as well as a decline in outside commodity markets, an analyst said. Gold and silver are weaker and crude oil futures are more than US$1 per barrel lower as well, the analyst noted.

 

Further weakness in equity markets are also expected to add to the defensive tone, a trader said. Stock index futures are off sharply, pointing to a lower opening and if stocks are holding big declines it won't be positive for grains as people will exit commodities seeking liquidity, a commission house analyst said. March S&P 500 index futures were trading over 32 points lower.

 

In Argentina, moisture stress continues to developing corn in major growing areas though some shower activity is expected this weekend, DTN Meteorlogix Weather said. Dry weather with only a chance for a few thundershowers is forecast through Friday, with the possibility of a few showers favoring western sections of the region during the weekend. Temperatures are expected to be near-to-above normal Thursday and Friday, Meteorlogix Weather said.

 

On daily technical charts, March corn closed lower and near mid-range, undermined by worries of a U.S. economic recession and market uncertainty, a market technician said. Some near-term technical chart damage occurred with some upside price gaps filled on the downside, the technician said. The bull's next major upside objective remains closing prices above psychological resistance at US$5.00 per bushel, with the next downside rice objective closing prices below solid support at US$4.80.

 

First resistance for March corn is seen at US$4.95, and then at US$5.00. First support is seen at US$4.80 and then at US$4.75.

 

In other corn news, cash corn prices in China were lower in the week ended Wednesday with producers actively selling ahead of the Lunar New Year holiday in February. China sold 43,800 tonnes of corn to domestic end-users Tuesday, 8.8% of the 496,600 tonnes in planned to sell. Corn prices are likely to decline in the near-term due to the government's price control measures, but its fundamentals remain strong, analysts said.

 

South Korea's Nonghyup Feed Inc. bought 165,000 metric tonnes of optional-origin corn, a trader in Seoul said Wednesday.

 

Corn futures on China's Dalian Commodities Exchange settled modestly higher with the benchmark Sept. contract up RMB7 lower at 1,730RMB/tonne.