February 1, 2008

 

CBOT Corn Outlook on Friday: Up 3-5 cents on spillover, overnight strength

 

 

Chicago Board of Trade corn futures are predicted to start daytime trading 3 cents to 5 cents higher Friday, supported by higher prices in overnight trade and spillover from an expected higher start in wheat as well as a rally in precious metals, traders said.

 

In overnight electronic trading, March corn gained 5 1/4 cents to US$5.06 1/2 per bushel and December rose 5 cents to US$5.20 3/4. Electronic trading volume in March was 4,318 contracts.

 

Corn will be higher based on the gains during overnight trade, a commission house analyst said.

 

In addition, corn has been following wheat futures higher, and wheat is expected to open strong as spring wheat futures set another new all-time high in overnight trade, the analyst said.

 

MGE March spring wheat futures ended sharply higher Thursday and ended 29 3/4 cents higher to US$14.02 3/4 per bushel in overnight activity.

 

Stronger outside markets are also expected to provide underlying support, a trader said. Gold futures are holding moderate gains.

 

There is no fresh fundamental news to influence market direction, but it is the beginning of a new month and that could lead to additional interest from commodity trading firms, the trader noted.

 

In South America, a weather pattern will develop over the next seven days that will feature occasional light showers in major corn and soybean areas of central Argentina and southern Brazil with no severe heat, DTN Meteorlogix Weather said. In Argentina, dry conditions with only a few light showers are forecast through Sunday, with dry weather expected Monday through Wednesday, Meteorlogix said. Temperatures are expected near-to-below normal through Monday.

 

On daily technical charts, March corn closed higher, near the session high and traded a bullish "outside day" up on the daily bar chart, a technical analyst said. The next upside price objective remains to push and close above solid resistance at US$5.06 3/4, this week's high. The next downside price objective is closing prices below solid support at US$4.90.

 

First resistance for March corn is seen at US$5.05, and then at US$5.06 3/4. First support is seen at US$4.92, Thursday's low and then at US$4.90.

 

In other corn news, the Korea Feed Association bought 100,000 metric tonnes of U.S. corn from ADM this week, a trader in Seoul said Friday. South Korea's Nonghyup Feed Inc. rejected all bids in a tender to buy 275,000 metric tonnes of corn Thursday, a company official said Friday.

 

Corn futures on China's Dalian Commodities Exchange settled higher with the benchmark Sept. contract up RMB/8 at 1,752RMB/tonne.