February 15, 2008

 

CBOT Corn Outlook on Friday: Up 2-3 cents on follow through, overnight gains

 

 

Chicago Board of Trade corn futures are predicted to open 2-to-3 cents higher Friday, bolstered by follow through buying from Thursday, firm prices in overnight trade and spillover from an expected higher start in soybeans and wheat, analysts said.

 

In overnight electronic trading, March corn gained 2 3/4 cents to US$5.13 3/4 per bushel and December rose 5 cents to US$5.37 1/4. Electronic trading volume in March was 5,545 contracts.

 

Corn should be higher on follow through buying from Thursday's good gains, a commission house analyst said. The upside will also be supported by spillover from wheat and soybeans, the analyst said. Minneapolis wheat was sharply higher overnight to new all-time highs and soybeans were strong on sharply higher palm oil prices overseas, the analyst said.

 

The market will also be underpinned by stronger prices in "outside" markets, a trader said. Precious metals are higher and crude oil is stronger which should also underpin corn as investor interest in commodities grows given the stock market's weakness, the trader said.

 

However, gains could be tempered as corn could see some profit taking ahead of the long weekend and after the gains set this week, the trader added.

 

Monday, the CBOT will be closed for the Presidents Day holiday.

 

In Argentina, mainly dry weather is expected Saturday with a chance for showers to develop Sunday with scattered showers and thundershowers with amounts of 0.25-to-0.75 possible Monday and Tuesday, DTN Meteorlogix Weather said. Temperatures are expected to average near-to-above normal through Tuesday.

 

On daily technical charts, July corn gapped open higher and closed near the session high on fund buying and short covering, a market technician said. Corn bulls regained some fresh upside technical momentum and their next upside price objective is to push and close prices above solid technical resistance at US$5.42. The next downside objective is closing prices below solid support at US$5.21 1/2, which would fill on the downside Thursday's big upside price gap on the daily bar chart, the technician said.

 

First resistance for July corn is seen at US$5.35, and then at US$5.42. First support is seen at US$5.30 and then at Thursday's low of US$5.25 1/2.

 

In other corn news, Mexico's 2008 spring-summer corn harvest is expected to increase 3.2% to 17.5 million metric tonnes from the 16.975 million tonnes harvested in 2007, the Agriculture Ministry's Statistical agency said Thursday. The Mexican corn crop is almost exclusively white corn.

 

Corn futures on China's Dalian Commodity Exchange ended near unchanged with the September contract up RMB2 higher at 1,797RMB/tonne.