April 12, 2006

 

CBOT Corn Outlook on Wednesday: Steady; searching for direction

 

 

Corn futures at the Chicago Board of Trade are expected to begin trading steady Wednesday as a quiet market overnight and the lack of fresh news is expected to keep futures near values established overnight, sources said.

 

In overnight e-CBOT trading, May corn ended unchanged at $2.42 per bushel, July slipped 1/4 cent to $2.53 1/2 and December also finished unchanged at $2.73 3/4.

 

The market should start out steady, a floor analyst said. Corn was quiet overnight and there isn't much fresh news to trade off of, he added. The outside markets are mixed and it looks like the market is winding down ahead of the three-day weekend beginning Friday.

 

The CBOT is closed Friday in observance of Good Friday.

 

Overall, the market looks to be quiet but the Goldman Sachs roll out of May into July should continue, a floor trader said.

 

According to preliminary volume and open interest released by the exchange, May open interest declined by over 34,000 contracts while July open interest increased by over 20,000 contracts.

 

The Goldman roll occurs when the Goldman Sachs Commodity Index rebalances its holdings in the futures that make up the index.

 

In the U.S. Midwest corn growing area, there is a chance for a few light showers Thursday in the region with mostly dry weather Friday. Showers and possible thundershowers are forecast for the weekend with amounts 0.30-1.00 inch and locally heavier, DTN Meteorlogix Weather said. Temperatures will average above normal for the period.

 

In the eastern U.S. Midwest, episodes of light rain or showers are possible through Friday with amounts of 0.10-0.50 inch possible and locally heavier, DTN Meteorlogix Weather said. Additional showers are possible over the weekend in the northern and eastern sections of the region with mostly dry weather or a few light showers elsewhere in the region. Temperatures will average near to above average in much of the period, DTN Meteorlogix noted.

 

On technical charts, last week's high of $2.55 in July remains strong overhead technical resistance but if July can close above that level it suggests another solid run up in prices, a technical analyst said. First resistance for July corn is pegged at $2.55, and then at $2.58. First support is seen at $2.50 1/4, Tuesday's low and then at $2.48.

 

In other corn news, corn prices in China remained steady in the week ended Wednesday as light farmer selling trimmed price pressures in an oversupplied market, sources said. Farmers have started spring plowing and have sold most of their stocks, an analyst said.

 

Corn futures at China's Dalian futures exchange ended slightly lower. The September contract finished RMB4 lower at RMB1,369/tonne.