September 5, 2007

 

CBOT Corn Outlook on Wednesday: Seen 1-3 cents higher, following wheat rally

 

 

Chicago Board of Trade corn futures are predicted to begin trading 1-to-3 cents higher Wednesday, boosted by steep gains seen in wheat futures in overnight trade, analysts said.

 

In overnight electronic trading, September corn rose 1 3/4 cents to US$3.38 1/2 per bushel and December gained 2 cents to US$3.55 1/4. E-CBOT volume in December was 22,318 contracts.

 

"It's all about the wheat," a commission house analyst said. Wheat continues to rally and corn will be a reluctant follower. Crop conditions remain favorable and the crop is maturing but the focus will be on wheat prices, the analyst said.

 

In overnight trading December wheat jumped 30 cents to US$8.35 1/2 and wheat is expected to open day time trading 25-to-30 cents higher.

 

Tuesday afternoon, the U.S. Department of Agriculture reported that 59% of the U.S. corn crop was in good-to-excellent condition, unchanged from last year. Ninety-six percent of the crop was in the dough stage, slightly above the five-year average of 92%. Seventy-nine percent of the crop was in the dent stage, and 25% of the crop was rated mature, above the five-year average of 17%.

 

In the western U.S. Midwest there is a chance for a few showers and scattered thundershowers Thursday of Friday with amounts of 0.10-0.60 inch and locally heavier, DTN Meteorlogix Weather said. Temperatures are expected to average near-to- above normal.

 

In the eastern U.S. Midwest, there is a chance for scattered showers with amounts of 0.10-0.75 inch Thursday into Friday with temperatures expected to average above to well above normal in the period, Meteorlogix Weather said.

 

In the 6-to-10 day forecast, temperatures are expected to average near-to-below normal and rainfall is forecast to average near-to-below normal, except in the extreme east and northwest where it may possibly be near-to-above-normal.

 

On daily technical charts, December corn closed near the session high on short covering and spillover from the big gains seen in wheat and corn, a technical analyst said. However, given the large gains seen in both wheat and soybeans, the rally in corn was not that impressive, the analyst said. The U.S. corn harvest is approaching and that is seasonally bearish for corn prices, he said. The bulls' next upside price objective is to push prices above solid resistance above US$3.60 in December while the bears' next downside objective remains closing prices below support at US$3.38 1/4, last week's low.

 

First resistance for December corn is seen at US$3.57 1/4 and then at US$3.60. First support is seen at US$3.50 and then at US$3.47 1/2.

 

Deliveries posted against the Chicago Board of Trade September corn future were 1,572 contracts. Large issuers included the house account of ADM Investor Services which issued 1,200 contracts and the customer account of ADM Investor Services which issued 213 contracts. Large stoppers included the customer account of Dorman Trading, which stopped 583 contracts, and the customer account of Man Professional Clearing, which stopped 330 contracts. The last trade assigned was Aug. 31.

 

In other corn news, cash corn prices in China were mostly stable in the week ended Wednesday, with prices in some regions increasing on improving demand for soymeal, analysts said.

 

Corn futures on China's Dalian Commodities Exchange settled mostly lower with the benchmark May contract down RMB/16 at RMB1,637 per metric tonne.