April 26, 2006

 

CBOT Corn Outlook on Wednesday: Steady to up 1/2 cent, looking for direction

 

 

Corn futures at the Chicago Board of Trade are expected to begin Wednesday steady to up 1/2 cent as a lack of fresh inputs has the market searching for direction, floor sources said.

 

In overnight e-CBOT trading, May corn ended unchanged at US$2.31 per bushel, July rose 1/4 cent to US$2.42 1/2, and December also gained 1/4 cent to US$2.66.

 

There was no news overnight and the outside markets are quiet for a change, a floor analyst said. However, the market could see some additional liquidation in the May contract, he added.

 

It's a bit of a concern that July closed below most major moving averages Tuesday and that gives a little bit of an edge towards filling that gap that exists on the daily chart, said John Kleist, of Kleist Ag Consulting in Arlington Heights, Ill.

 

On daily technical charts an upside gap was created in late March between US$2.39 and US$2.45 in July.

 

In addition, there has been favorable weather for corn planting and the forecast looks good longer term. There has been a lot built into the corn market to try and buy some acres back and they were bought back, he added.

 

In the western U.S. Midwest, mainly dry weather is expected Wednesday and Thursday before a chance for showers and rain in the eastern areas on Thursday night or Friday with amounts of 0.25-1.00 expected in some locations, DTN Meteorlogix Weather said.

 

The rain may linger in western sections on Saturday and temperatures are forecast to average near to above normal west and below normal east.

 

In the eastern U.S. Midwest, mainly dry conditions are forecast Thursday and Friday with rain and possible thundershowers during Saturday which may linger into Sunday, DTN Meteorlogix said. Rainfall should average 0.30-1.50 inches during this period.

 

Temperatures will average near to below normal early in the period and below normal late in the period, DTN Meteorlogix Weather said.

 

Cash corn basis bids were mixed Wednesday morning. Central Illinois was unchanged at 1 cent over the May.

 

On technical charts, July hit a fresh 3-week lower on Tuesday, but still no serious chart damage has occurred, a technical analyst said. It will take a close back above US$2.50 to provide the bulls with some fresh technical upside momentum, he added. First resistance for July corn is seen at US$2.45 1/4, Tuesday's high and then at US$2.48. First support is seen at US$2.41, and then at US$2.40.

 

Corn futures on China's Dalian futures exchange settled mostly higher with the January contract up RMB13 at RMB1,406/tonne.