January 27, 2006

 

CBOT Corn Outlook on Friday: 1/2-1 cent higher, following e-CBOT, soy

 

 

Corn futures at the Chicago Board of Trade are expected to begin trading 1/2-1c higher Friday, following e-CBOT activity and the overnight strength in soybeans, sources said.

 

In overnight e-CBOT trading, March corn rose 1 1/4 cents to $2.18 1/4 per bushel, May corn gained 1 1/4 cents to $2.28, and July corn also increased 1 1/4 cents to $2.37.

 

Overnight, corn was supported by the strength in soybeans, so corn could see some additional support this morning, a floor trader said. March soybeans rose 9 1/2 cents to $5.82 1/2 in the e-CBOT session, with soybeans called to open 7-10 cents higher Friday morning.

 

In addition, the funds are the still the determining factor in corn. If they keep buying, corn will continue to trade higher, he added.

 

Hot and dry weather in Argentina, with little rain forecast for much of the country in the next several days helped pushed soybean futures overnight, a floor analyst said.

 

There is a slight chance for isolated showers through Sunday with temperatures expected in the upper 80's F through the upper 90's F in the period through Sunday, DTN Meteorlogix weather said.

 

March corn has rallied this week as heavy fund buying has helped push futures to their highest levels since the start of the calendar year, with March corn settling Thursday at its highest level since Jan. 4.

 

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

 

On technical charts, a close above the January high of $2.21 would provide the bulls with better upside technical momentum, a technical analyst said. He sees first resistance for March corn is seen at $2.17 1/4, Thursday's high and then at $2.18 1/4, this week's high. First support is seen at Wednesday's low of $2.15, and then at $2.13 1/2, the bottom of upside price gap on the daily bar chart.

 

Corn futures traded on China's Dalian Futures Exchange ended mostly higher Friday, bolstered by light speculative buying, sources said. The most-active September contract gained RMB12, ending at RMB1,439/tonne.