March 16, 2007

 

CBOT Corn Outlook on Friday: Down 1-3 cents on spillover, technical weakness

 

 

Chicago Board of Trade corn futures are forecast to start day session trading 1-to-3 cents lower Friday, after weaker prices in overnight activity, a poor technical price pattern and spillover selling from Thursday, a commission house analyst said.

 

In overnight electronic trading, May corn fell 3 3/4 cents to US$3.94 per bushel, July declined 3 1/2 cents to US$4.05 1/2 and December slipped 2 3/4 cents to US$3.94 3/4. E-CBOT volume in May was 8,684 contracts.

 

Corn closed weaker Thursday on speculative fund and technical selling and it was lower overnight so it should open to the downside on follow through selling in the absence of fresh news, a floor analyst said.

 

May corn closed below US$4.00 per bushel, which is negative technically, the funds continue to liquidate their positions and there was little fresh news out overnight to support the market, a floor trader said. However, corn could see some position squaring after the opening and ahead of a private analytical firm's acreage estimates due out around mid-session, with price direction depending upon market reaction to the estimates, he added.

 

The U.S. Department of Agriculture planting intentions report is due out March 30.

 

On daily open auction technical charts, CBOT May corn closed at its lowest level in two months, with prices finishing below psychological support at US$4.00 per bushel, a technical analyst said. A weekly low close Friday would suggest corn has reached a near-term market top, the analyst added.

 

Market bulls need to close prices above solid chart resistance at US$4.15, while the bears' next downside objective is closing prices below solid support at US$3.96 1/2.

 

First resistance is seen at US$4.00 and then at US$4.05. First support is seen at US$3.96 1/2 and then at US$3.90.

 

In the U.S. Midwest, mainly dry conditions are forecast for the weekend with light to locally moderate precipitation expected on Monday, DTN Meteorologix Weather said. Temperatures are expected to average below normal in the period, Meteorologix Weather said.

 

In other news, corn futures on China's Dalian Commodities Exchange ended mostly lower with the most active September contract down RMB5 at RMB1,690/tonne.

 

Turkey bought 235,000 metric tonnes of corn from Argentina, Ukraine and the EU, an analytical firm reported.