June 6, 2007

 

CBOT Corn Outlook on Wednesday: Up 1-3 cents on firm E-CBOT, weather forecasts

 

 

Chicago Board of Trade corn futures are expected to start daytime trading 1-to-3 cents higher Wednesday following firmer prices in overnight trading as well as concerns about longer-term weather conditions, analysts said.

 

In overnight electronic trading, July corn ended up 1 3/4 cents to US$3.82 per bushel, September rose 1 1/2 cents to US$3.87 1/4 and December gained 2 3/4 cents to US$3.85 1/2. E-CBOT volume in July was 5,499 contracts.

 

The market should start out higher based on overnight price strength, a floor analyst said. Some support might also be generated from overnight forecasts suggesting a ridge will develop in the U.S. Midwest in longer-term forecasts, reducing rainfall potential in eastern sections of the region, the analyst said.

 

There is limited fresh news out, so corn will look to the other markets for direction and wait for updated midday weather forecasts for direction, a trader said. Despite some talk of a ridge developing longer term in the U.S. Midwest, it's hard to be bullish on a forecast that is two weeks away, the trader said.

 

In the western U.S. Midwest, there is a chance for scattered showers Wednesday night and Thursday with amounts of 0.10-0.50 and locally heavier before dry weather returns Friday, DTN Meteorologix Weather said. Temperatures are expected to average near to above normal Wednesday and Thursday, with cooler weather Friday.

 

In the eastern U.S. Midwest, mainly dry weather is expected Thursday with scattered showers and thundershowers possible Thursday night into Friday morning, Meteorologix Weather said. Amounts expected are 0.10-0.50 and locally heavier. Temperatures are forecast to average above normal Thursday and near-to-above normal Friday.

 

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 east, Meteorologix Weather said.

 

On daily technical charts July closed lower on profit-taking from recent gains, though no serious chart damage occurred, a technical analyst said. The bulls' next upside price objective is closing prices above Tuesday's high of US$3.90 per bushel, with the next downside objective for the bears is closing prices below solid support at US$3.75 per bushel.

 

First resistance is pegged at US$3.85 and then at US$3.90. First support is seen at Tuesday's low of US$3.77 1/2 and then at US$3.75.

 

In other corn news, cash corn prices in China are expected to remain at firm levels as domestic corn supplies are forecast to remain tight until the new crop harvest begins in the fall, analysts said.

 

Corn futures on China's Dalian Commodities Exchange ended little changed with the benchmark September contract up RMB/1 at RMB1,661 per metric tonne.