July 25, 2007

 

CBOT Corn Outlook on Wednesday: 2-3 cents higher on follow-through buying

 

 

Chicago Board of Trade corn futures are expected to start Wednesday's day session 2 to 3 cents higher on follow-through from stronger prices in Tuesday's day session and overnight trading, analysts said.

 

In overnight electronic trading September corn gained 2 3/4 cents to US$3.14 1/4 per bushel, and December rose 3 1/4 cents to US$3.30. E-CBOT volume in December was 2,764 contracts.

 

Corn should open higher but trade both sides of unchanged on a lack of fresh fundamental news, an analyst said. Volume is expected to be light as well. Overnight trading "was one of the quietest volume nights we've had in a long time," a trader said.

 

Corn is expected to be a follower of wheat again Wednesday on the lack of corn market news, an analyst said.

 

The trading day should start in light activity while traders wait to see if the midday weather forecasts will change from overnight forecasts, an analyst said.

 

Currently, spotty rains are expected Wednesday through Saturday in the U.S. Midwest with close to normal temperatures, a trader said. The lack of severe heat and the expected small amounts of rainfall should even out weather fundamentals and give bears and bulls little to trade on, the trader said.

 

Also, most of the corn crop is well through its pollination stage, with only some western crops in the western corn belt still in danger of heat stress, an analyst said.

 

In the western U.S. Midwest, there is a chance for isolated afternoon thundershowers in the west Wednesday, and a chance for scattered showers and thundershowers Thursday night and Friday with rainfall potential of 0.10-0.75 inch, DTN Meteorologix said. Saturday and Sunday should be mainly dry with a few afternoon thundershowers in the west Sunday.

 

Temperatures in the region should average above normal Wednesday and Thursday but cooler on Friday, DTN said. Temperatures will average near-to-above normal west, and near to below normal east Saturday and Sunday.

 

In the eastern U.S. Midwest, there is a chance for a few afternoon thundershowers through eastern Indiana and in Ohio Wednesday and Thursday, and dry conditions elsewhere, DTN said. There is a chance for scattered showers and thundershowers during Friday with rainfall potential of 0.25-1.00 inch, and a chance for a few thundershowers in the south Saturday with fair conditions north.

 

Temperatures in the region will average near-to-below normal Wednesday, near-to-above normal west and near-to-below normal east Thursday, DTN said. Friday's temperatures will be near-to-below normal, while Saturday and Sunday's will average near-to-below normal.

 

The 6-10 day outlook calls for rainfall near-to-below normal and temperatures averaging near-to-above normal.

 

On daily technical charts, December corn prices Tuesday closed nearer the session low. Tepid short covering in a bear market was featured, a technical analyst said. There is little fresh news for corn traders. Most of the corn crop has made it through the critical pollination phase in generally good shape. Weather is deemed benign at present and that favors the bears.

 

The next downside price objective for the bears is to close prices below solid support at this week's low of US$3.24 1/2. The bulls' next upside price objective is closing prices above solid technical resistance at US$3.40.

 

First resistance for December corn is seen at Tuesday's high of US$3.32 1/4 and then at US$3.36. First support is seen at this week's low of US$3.24 1/2 and then at US$3.20.

 

In other corn news, corn futures on China's Dalian Commodities Exchange were lower with the benchmark January contract down RMB15 at RMB1,481 per metric tonne.