April 18, 2007

 

CBOT Corn Outlook on Wednesday: Steady to up 1 cent following overnight trade

 

 

Chicago Board of Trade corn futures are forecast to start day session activity steady to one cent higher Wednesday following the tone established in overnight activity with trading expected to be choppy, analysts said.

 

In overnight electronic trading, May corn rose 1 cent to US$3.54 1/2 per bushel, July gained 3/4 cent to US$3.66 and December rose 1 cent to US$3.80 1/2. E-CBOT volume in July was 4,647 contracts.

 

Corn futures stabilized in overnight activity and the market could consolidate further after recent price weakness, a floor analyst said. However, corn could see follow through selling from Tuesday, the analyst added.

 

There is some uncertainty about the longer-term weather picture and that could keep trading choppy and two-sided, a floor trader said. There was little fresh positive news out overnight and that could prompt follow through technical liquidation, the trader added.

 

In Tuesday trade, May, July and December settled beneath their 10-day moving averages.

 

In the western U.S. Midwest, dry weather is expected most of Thursday with a little light rain or drizzle possible in northern sections on Friday, DTN Meteorologix Weather said. Temperatures are expected to average below normal Thursday and above normal Friday.

 

In the eastern sections of the region dry weather is forecast for Thursday and Friday with temperatures near-to-above normal.

 

In the 6-to-10 day weather outlook, Meteorologix Weather forecasts temperatures to average near-to-below normal west and near-to-above normal east. Precipitation is forecast near-to-above normal south and east and near-to-below normal northwest.

 

On daily technical charts, July corn closed near the session low and traded an "outside day" down on the daily bar chart Tuesday, a technical analyst said. Trading should be choppy with the bears' next downside objective closing prices below solid support at US$3.61 1/4, with the bulls' next upside objective pushing prices above last week's high of US$3.85 1/2, the analyst said.

 

First support is seen at US$3.61 1/4 and then at the April low of US$3.55 1/2. First resistance is pegged at US$3.70 and then at US$3.75.

 

In other corn news, China issued a corn export quota for 3 million metric tonnes to expire at the end of February 2008, with 1.2 million tonnes filled by the end of June or July this year or the quota will expire, a person familiar with the situation said.

 

China's corn exports in the January-February period were up 25% on year to 1.77 million tonnes.

 

The Korea Feed Association and the Major Feedmill Group have rejected all bids in their joint tender for 495,000 metric tonnes of corn an MFG official said Wednesday. A re-tender is likely but the official didn't specify the date.

 

The French state grains board trimmed its 2006-07 corn ending stocks in April by 37,000 metric tonnes to 1.886 million tonnes.

 

Cash corn prices in China were higher in the week ended Wednesday on the news that the government issued a corn export quota.

 

Corn futures on China's Dalian Futures Exchange settled lower with the September contract down RMB/21 at RMB1,640/tonne.