March 1, 2006

 

CBOT Corn Outlook on Wednesday: Down 1-2 cents on weak tone, overnight trade

 

 

Corn futures at the Chicago Board of Trade are called to open weaker on Wednesday, pressured by overnight losses and a generally weaker tone across the grains market.

 

Most-active May corn is called to open 1-2 cents weaker.

 

In overnight trade, May corn fell 2 cents to US$2.36 3/4 a bushel, while March fell 2 cents to US$2.26.

 

"I just think we're due for a little setback in here. The technicals looks like that after trying to press it to the upside," said Dax Wedemeyer, broker at U.S. Commodities in West Des Moines, Iowa.

 

Corn also may follow the wheat market down, he said, with wheat called 2-3 cents lower.

 

Meanwhile, generally beneficial weather is forecast for South America's corn-growing regions, DTN Meteorologix said.

 

Argentina saw scattered showers overnight through eastern Cordoba, southern Sante Fe and far northern Buenos Aires, while elsewhere it was dry, with below-normal temperatures. The forecast for Wednesday through Friday calls for a few light showers, turning heavier by Friday, with temperatures below normal. The weekend should remain dry and cooler.

 

Brazil saw isolated thunderstorms overnight in southwestern Parana and northern Santa Catarina, with normal temperatures. For Rio Grande do Sul and Parana, the isolated showers are expected to continue in Parana Wednesday and Thursday, while Rio Grande do Sul is expected to see scattered showers Friday and Saturday.

 

The CBOT has not yet issued delivery notices for corn. Deliveries on Tuesday totaled 2,017 contracts.

 

Domestic Chinese corn prices rose on the week on strong demand from processors.

 

On China's Dalian Commodity Exchange Wednesday, corn futures fell on long liquidation as the market faces a short-term downward correction. The benchmark September contract lost RMB7 to settle at RMB1,465 per metric tonne.

 

Nearby technical resistance on May corn is met at US$2.39 3/4, US$2.43 1/4, then the gap that runs from US$2.43 1/2-US$2.44 3/4. The US$2.51-US$2.52 area serves as further resistance. Support is uncovered at US$2.37 3/4, US$2.36 1/2, US$2.35 1/4, US$2.33 1/4 and US$2.30.