April 3, 2007

 

CBOT Corn Outlook on Tuesday: Up 2-3 cents; following firm overnight session

 

 

Chicago Board of Trade corn futures are forecast to begin trading 2-to-3 cents higher Tuesday as firm prices in overnight trading is expected to support corn with ideas that the market is due for a bounce after two days of heavy losses, a floor analyst said.

 

In overnight electronic trading, May corn gained 2 3/4 cents to US$3.57 1/2 per bushel, July also rose 2 3/4 cents to US$3.69 1/4 and December gained 2 1/2 cents to US$3.72. E-CBOT volume in May was 7,841 contracts.

 

The market has sold off hard the last two sessions and should stabilize after corn traded higher in the overnight trade, a floor analyst said. There could be some additional liquidation, but the market is due for a bounce, he said.

 

Since Thursday's close May corn has declined 39 3/4 cents through Monday.

 

Corn is due for a "turnaround Tuesday," and should trade higher, a floor trader said. Although the weather turns colder this week, most of the U.S. corn belt turns drier over the next several days which could limit wet weather concerns, the trader added.

In the western U.S. Midwest, dry and windy conditions are expected on Wednesday and Thursday with temperatures below normal Wednesday and Thursday, DTN Meteorologix Weather said.

 

In the eastern sections of the region mostly dry weather is expected both Wednesday and Thursday, though snow showers are possible north on Wednesday, Meteorologix said. Temperatures are forecast below normal both Wednesday and Thursday.

 

On daily technical charts, serious near-term chart damage has occurred in CBOT May corn the past two days as prices have seen a bearish downside break out from a down trading channel on the daily bar chart, a technical analyst said. The bears' next downside objective is closing prices below solid chart support at US$3.40, while bulls would regain some upside technical momentum by pushing prices above solid chart resistance at US$3.85, which would fill on the upside Monday and Friday's huge downside price gap on the daily bar chart.

 

First resistance for May is seen at US$3.60 and then at US$3.70. First support is pegged at US$3.54 1/2 and then at US$3.50.

 

In other corn news, corn futures on China's Dalian Commodities Exchange ended higher on short-covering after Monday's decline analysts said with the bench mark September contract gaining RMB/13 to RMB1,667/tonne.