February 21, 2007

 

CBOT Corn Outlook on Wednesday: Down 1/2-1 cent on e-CBOT; lacks fresh news

 

 

Chicago Board of Trade corn futures are seen opening Wednesday's day session with a steady to weaker undertone, as the market takes its cue from overnight trade amid the absence of fresh market influences.

 

Analysts expect corn to open 1/2 to 1-cent lower.

 

In overnight electronic trading, March corn ended 1/4-cent lower at US$4.15, May corn finished 1 1/4-cent lower at US$4.27, and December corn was 3/4-cent lower at US$4.12 1/2.

 

The market is poised for a slightly weaker theme initially, with nearby contracts remaining pressured by the rolling of positions to deferred month futures, said Don Roose, president U.S. Commodities in West Des Moines, IA.

 

Trade positioning will remain a feature as end of the month and first notice day approaches next week, traders said.

 

A weaker tone in outside markets such as crude oil futures, will aid the defensive tone as well, Roose added.

 

Meanwhile, a quiet news front will keep futures looking for direction with Asian markets on holiday and South American markets celebrating Carnival, so participation may remain limited, traders said.

 

However, technical features should play a key role in the day's action, with traders keenly watching if futures can mount a serious charge near contract highs.

 

The market is currently at the top end of its trading range, and futures may be at a stall out point to the upside as traders look ahead to fresh news possibly from next week's U.S. Department of Agriculture outlook conference, Roose said.

 

A technical analyst said market bulls still have upside technical momentum. The next major upside objective for May corn is to produce a close above solid chart resistance at US$4.50. The next downside price objective is producing a close below solid chart support at US$4.15.

 

First resistance for March corn is seen at Tuesday's high and the contract high of US$4.30 1/2 and then at US$4.35. First support is seen at Tuesday's low of US$4.26 3/4 and then at US$4.20.

 

The DTN Meteorlogix Weather Service forecast said there are no significant weather concerns for the western Midwest into Friday. A strong storm is projected for Friday night and Saturday. This means at least heavy rain and strong winds but it may mean heavy snow and strong winds in some areas.

 

In the eastern Midwest, warmer weather should allow for some improvement on the rivers through Friday. Stormy weather during the weekend will translate into means heavy rain and strong winds, possibly ending as snow, Meteorlogix reports.

 

U.S. Midwest cash corn basis bids were mostly steady Wednesday, cash traders said. Spot U.S. cash corn bids were down 1-cent in Cedar Rapids, IA., and up 9 1/2 cents in Peoria, Ill.