August 28, 2007

 

CBOT Corn Outlook on Tuesday: Steady to 1 cent higher start expected

 

 

Chicago Board of Trade corn futures are expected to open steady-to-1 cent higher Tuesday as spillover support from wheat futures is expected to underpin prices at the opening, analysts said.

 

In overnight electronic trading, September corn rose 3/4 cent to US$3.36 1/2 per bushel and December also gained 3/4 cent to US$3.53 3/4. E-CBOT volume in December was 3,202 contracts.

 

Corn is expected to begin trading modestly higher on the strength in wheat, an analyst said. Wheat ended the overnight session up more than 10 cents at the CBOT and is expected to open 8-to-11 cents higher and that should underpin corn, the analyst added.

 

Corn conditions in Monday's crop progress report were little changed but are not expected to have much impact a trader said.

 

The U.S. Department of Agriculture reported that 59% of the U.S. corn crop was in good-to-excellent condition, up one percentage point from the previous week and in-line with expectations of little change. In Illinois, ratings were unchanged at 72% good-to-excellent while in Iowa conditions slipped one percentage point to 71% good-to-excellent.

 

Ninety-one percent of the crop was reported in the dough stage, with 63% of the crop in the dent stage. Twelve percent of the crop was mature, compared to 11% last year and the five-year average of 9%.

 

In the western U.S. Midwest scattered thunderstorms with amounts of 0.30-1.50 inches are possible Thursday before drier weather moves into the region Wednesday and Thursday, DTN Meteorlogix Weather said. Temperatures are expected to average near-to-above normal Tuesday and near normal Wednesday and Thursday.

 

In the eastern U.S. Midwest mainly dry weather is expected Tuesday with isolated showers possible on Wednesday, Meteorlogix Weather said. Temperatures are predicted to average above normal Tuesday and Wednesday and near-to-above normal Thursday.

 

In the 6-to-10 day forecast, temperatures are expected to average above normal and rainfall is expected near-to-below normal, Meteorlogix Weather said.

 

On daily technical charts, December corn gapped open lower Monday on the daily bar chart but closed near the session high, a technical analyst said. The U.S. corn harvest is fast approaching and that is seasonally bearish for corn futures, the analyst said. The bulls' next upside price objective is to push prices above solid resistance above US$3.58 in December, which is the top of Monday's downside price gap. The bears' next objective is to close prices below support at US$3.50.

 

First resistance for December corn is seen at Monday's high of US$3.54 1/4 and then at US$3.58. First support is seen at US$3.50 and then at US$3.48 1/2, Monday's low.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled higher with the May contract up RMB/13 at RMB1,602 per metric tonne.