June 5, 2007

 

CBOT Corn Outlook on Tuesday: 3-4 cents higher on soy, wheat spillover

 

 

Chicago Board of Trade corn futures are predicted to begin day session trading 3 to 4 cents higher Tuesday, following overnight gains and an expected higher start in soybeans and wheat, analysts said.

 

In overnight electronic trading, July corn rose 3 cents to US$3.86 3/4 per bushel, September gained 1 3/4 cents to US$3.90 and December advanced 3 1/2 cents to US$3.86 1/2. E-CBOT volume in July was 3,938 contracts.

 

Corn should begin trading higher on the expected gains in soybeans, an analyst said. If soybeans open 10 cents higher, corn will be higher in sympathy, the analyst added. Soybeans are called to open 10 to 13 cents higher, while wheat is expected to open 4 to 6 cents higher.

 

Crop conditions remain at high levels which are not bullish for the market but the longer-term weather is supportive for corn with some forecasts putting a moisture blocking ridge back into their longer-range forecasts, the analyst said.

 

The U.S. Department of Agriculture reported that 78% of the U.S. corn crop was in good-to-excellent condition, unchanged from the previous week. Analysts had expected no change to down one percentage point in the rating.

 

In the major corn states, Illinois corn was rated 79% good-to-excellent, down two percentage points from last week, and Iowa was down 1 percentage point at 79%. Ninety-four percent of the crop had emerged compared to the five-year average of 88%.

 

The corn market doesn't want to go down and until the funds want to sell it, corn will be hard pressed to go lower, a commission house analyst said

 

In the western U.S. Midwest, dry weather or only a few light showers in northern areas of the region are expected Wednesday, said DTN Meteorologix Weather said. Scattered thundershowers with amounts of 0.10-0.50 and locally heavier are forecast Wednesday night into Thursday. Temperatures are expected to average near normal Wednesday and near- to above-normal Thursday.

 

In the eastern U.S. Midwest, mainly dry weather with only the chance for a few light showers in northwest sections of the region are possible on Wednesday, Meteorologix Weather said. Scattered showers, with amounts of 0.10-0.50 are possible in western sections of the region Thursday. Temperatures are forecast to average near-normal Wednesday and above-normal Thursday.

 

In the 6-to-10 day outlook, temperatures are expected to average near- to above-normal with rainfall expected to average near- to above-normal west and near- to below-normal southeast, Meteorologix Weather said.

 

On daily technical charts July closed nearer the session low Monday, however, no serious chart damage occurred, a market technician said. The bulls' next upside price objective remains closing prices above US$3.96 1/2, with the next downside price objective for the bears is closing prices below US$3.75 per bushel.

 

First resistance for July is seen at US$3.89 1/2, and then at US$3.96 1/2. First support is seen at US$3.83, and then at US$3.80.

 

In other corn news, corn futures on China's Dalian Commodities Exchange ended slightly higher with the benchmark September contract up RMB2 at RMB1,665 per metric tonne.