February 5, 2008

 

CBOT Corn Outlook on Tuesday: Down 2-3 cents, following lower outside markets

 

 

Chicago Board of Trade corn futures are predicted to start day time trading 2 to 3 cents lower Tuesday, following lower crude oil and precious metals prices, analysts said. Trading however, will be choppy with a stronger start in wheat futures expected to limit downside momentum, analysts said.

 

In overnight electronic trading, March corn fell 2 1/4 cents to US$5.08 1/4 per bushel and December also declined 2 1/4 cents to US$5.30 1/2. Electronic trading volume in March was 4,902 contracts.

 

The market could start out under pressure from the lower outside inflationary markets, a commission house analyst said. Crude oil is trading nearly a dollar lower and gold is down more than US$10.00 per ounce. In addition, the dollar is sharply higher versus other major currencies, which should also dampen buying enthusiasm. Corn is due for a pullback and could see some profit-taking after its recent price run up, the commission house analyst said.

 

Any pullback in corn values is likely to be limited, a trader said. Corn has been supported by the recent rally in wheat futures and wheat is expected to open 7 to 10 cents higher as MGE spring wheat futures finished the overnight session limit up, 30 cents higher at US$14.63 per bushel, the highest prices ever recorded by any wheat future.

 

A lower than expected wheat stocks figure from Statistics Canada is also expected to supply support to wheat futures. Statistics Canada reported all-wheat stocks were 15.147 million metric tonnes as of Dec. 31, well below the 16.0 million to 16.9 million forecast by analysts.

 

A more favorable weather pattern in Argentina's crop growing regions is forecast for the next several days.

 

Mainly dry weather with only a few light showers are possible Wednesday, DTN Meteorlogix Weather said. Additional showers and thundershowers develop Thursday and into Friday with amounts of 0.25 to 1.00 inch and locally heavier, Meteorlogix Weather said. Temperatures are predicted above-normal Wednesday and near-to-above normal Thursday and Friday.

 

On daily technical charts, March corn closed higher and hit a fresh two-week high as stronger soybean and wheat prices underpinned corn, a technical analyst said. The next upside price objective is to push and close prices above solid resistance at US$5.19, the contract 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$5.11, and then at US$5.19. First support is seen at Monday's low of US$5.03 and then at US$5.00.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled slightly higher, benefiting from stronger soy complex prices, an analyst said. The benchmark Sept. contract settled up RMB6 at 1,779RMB/tonne.