April 11, 2007

 

CBOT Corn Outlook on Wednesday: Up 1-2c; e-CBOT, planting uncertainties

 

 

Chicago Board of Trade corn futures are seen starting Wednesday's day session higher, taking its cue from overnight trade, as the market continues to add weather premium amid wet, cold Midwest weather.

 

Analysts expect corn to open 1 to 2 cents higher.

 

In overnight electronic trading, May corn finished 1 3/4-cent higher at US$3.70 3/4, July corn was 1 1/2-cent higher at US$3.82 3/4, and December corn was 1/2-cent higher at US$3.95.

 

The threat of potential planting delays and the uncertainty of possible acres switching to soybeans continue to provide psychological support to prices, analysts said.

 

However, longer range forecasts showing a weather system previously forecast to roll into the Midwest next week has now been pushed south and could miss the corn belt, is expected to limit upside movement, analysts said. Nevertheless, the uncertainty of the weather and current rain and snow showers moving across the region is enough to keep a level of price support in the market, a CBOT floor analyst added.

 

Otherwise, speculative index fund rolling of May positions to deferred month futures are seen as featured attractions, traders added.

 

A technical analyst said market bears' next downside price objective is producing a close below solid chart support at US$3.70 basis July futures. The market would gain better upside technical momentum by pushing prices above solid chart resistance at US$3.96 1/2, which would fill on the upside a big downside price gap on the daily bar chart.

 

First resistance for July corn is seen at Tuesday's high of US$3.85 1/2 and then at US$3.90. First support is seen at US$3.78 and then at US$3.75.

 

The DTN Meteorlogix Weather Service forecast said snow and rain lingers in the western Midwest Wednesday, tapering to flurries overnight. Snowfall of 4 inches or more is possible over much of eastern Iowa and in southeast Minnesota. Mainly dry conditions are on tap for Thursday, but snow or rain may redevelop Friday through southern locations. Temperatures will average below normal during this period.

 

In the eastern Midwest, snow is moving through northwest parts of the region and far north Wednesday. Snow may linger in northern areas early Thursday, before drier conditions emerge. Snow or rain may redevelop in southern areas late Friday or Friday night. Precipitation from the first system will average 0.25-1.00 inch. Snow of at least 4 inches is possible over far northern Illinois and through Wisconsin and northern Michigan. Temperatures will average below or well below normal during this period, Meteorlogix forecasts.

 

The Meteorlogix 6-10 day outlook for the Midwest calls for temperatures to average near to above normal northwest, near to below normal elsewhere in the region. Precipitation near to above normal south and east, and near to below normal northwest.

 

The Philippine National Food Authority bought 120,000 metric tonnes of Argentine corn from trading houses Cargill and Toepfer in a tender concluded Wednesday.

 

In overseas markets, China's corn prices in major producing regions remained largely stable in the week ended Wednesday, but demand from the feed sector was still sluggish.

 

Corn futures traded on the Dalian Commodity Exchange settled higher. The benchmark September 2007 contract settled CNY1 higher at CNY1,690/tonne.