July 26, 2006

CBOT Corn Outlook on Wednesday: 1-2 cents higher on hot forecasts

Corn futures at the Chicago Board of Trade are seen beginning open auction trading 1-2 cents higher Wednesday, floor sources said.

Heat forecast for early next week is expected to support the market, an analyst said. Rain in the forecast is scattered and not an organized front, he added.

The market was a bit oversold during the previous session, and one analyst expects some recovery.

In overnight e-CBOT trading, September corn rose 1 1/4 cents to US$2.40 3/4 per bushel and December ended 1 cent higher at US$2.57.

On technical charts, last week's low of US$2.51 is strong technical support. The next major near-term downside price objective is the June low of US$2.47 3/4. The next upside price objective is closing prices above chart resistance at Tuesday's high of US$2.60 3/4. First resistance for December corn is seen at US$2.58 and then at US$2.60 3/4. First support is seen at US$2.56 3/4 - Tuesday's low - and then at US$2.53 3/4 - this week's low.

Near-term weather forecasts of scattered showers are an unorganized front and less influential than high temperatures predicted into next week, an analyst noted.

In the western U.S. Midwest, forecasts predict dry weather Thursday and Friday, with a possibility for widely scattered light precipitation over the weekend, DTN Meteorologix Weather said. Temperatures are expected to average above to well above normal through Sunday.

In the 6-10 day outlook, temperatures are expected to average above normal, and precipitation near to below normal, DTN Meteorologix Weather said.

In the eastern U.S. Midwest, there is a chance for scattered showers and thundershowers of 0.25-1.00 inches and locally heavier through southern and eastern Illinois, Indiana and Ohio during Thursday and Friday, Meteorologix Weather said. Temperatures through are expected to be near to above normal through the rest of the week, with temperatures in the upper-80s to mid- to low-90s Thursday and Friday, reaching highs in the low-to mid-90s and Saturday and Sunday.

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

In overseas trade, corn futures settled lower on China's Dalian Commodity Exchange Wednesday. The most widely held May 2007 contract settled at RMB1,412/tonne, down RMB11.