March 6, 2007

 

CBOT Corn Outlook on Tuesday: Up 1-2 cents on carryover buys, outside markets

 

 

Chicago Board of Trade corn futures are poised for a firm start to Tuesday's day session, taking their cue from overnight trade amid follow through buying from Monday's strong technical close.

 

Analysts expect corn to open 1 to 2 cents higher.

 

In overnight electronic trading, March corn ended 1 3/4-cents higher at US$4.19, May corn finished 2 cents higher at US$4.28 3/4, and December corn was 2 1/4 cents higher at US$4.11.

 

The market will be influenced by the firm overnight theme, with strength in outside metals, energies and rebounding world stock markets providing strength to attract speculative buying, analysts say.

 

Otherwise, a quiet news front will keep attention on technical factors, with scattered short covering interest seen emerging as the market gears up for Friday's supply and demand reports from the U.S. Department of Agriculture, traders added.

 

A technical analyst said the recent higher volatility at higher price levels is one bearish technical warning signal of a near-term market top. Market bulls need to work to fill a downside price gap on the daily bar chart that was created on Feb. 27. It will take a price move above US$4.38 basis May futures to fill that downside price gap and repair recent near-term chart damage. The next downside price objective is producing a close below solid chart support at Monday's low of US$4.13.

 

First resistance for March corn is seen at US$4.30 and then at US$4.36 1/4. First support is seen at US$4.20 and then at US$4.15.

 

U.S. Midwest cash corn basis bids were mostly steady Tuesday, cash traders said. Spot U.S. cash corn bids were down 3 cents in Cedar Rapids, IA., and down 3 cents in St. Louis, MO.

 

In deliveries, a total of 175 notices were placed against the CBOT March future. The last trade date assigned was Feb. 26. The house account at ADM Investor Services issued 42 lots, a customer account at FCStone issued 40 lots, and the house account at Tenco issued 41 lots. A customer account at Man Financial was the primary stopper scattered if 118 lots.

 

In other news, India has imposed restrictions on corn exports, which can now take place only through four government agencies, including the State Trading Corp., the government said in a statement Tuesday. The restrictions are effective immediately and valid for the next six months, it said.

 

In overseas markets, corn futures traded on China's Dalian Commodity Exchange settled mostly higher. The benchmark September corn contract settled RMB4 higher at RMB1,706/tonne.