September 13, 2006

CBOT Corn Outlook on Wednesday: Seen 1 cent lower, following overnight trade

CBOT corn futures are expected to begin day session trading 1 cent lower Wednesday, as spillover from weaker prices overnight and follow through from Tuesday's losses are expected to weigh on the market at the opening, sources said.

In overnight e-CBOT trading, September corn declined 1 1/4 cents to US$2.22 1/4 per bushel and December also fell 1 1/4 cents to US$2.36 1/2. e-CBOT volume overnight in December was 7,977 contracts.

Seasonally the market tends to be weak heading into harvest and Tuesday's production number was not friendly to corn, a floor trader said.

Overnight the market had kind of the "hangover" effect from Tuesday, said Don Roose, president of US Commodities in West Des Moines, Iowa. It appears that there has been a pick up in end-user buying and also exporter buying with Japan maybe in for some corn. It seems the increased export interest could buffer the recent break though technically the market remains soft and vulnerable, he added.

On technical charts, CBOT December corn hit a three-week low Tuesday and fresh chart damage has occurred to suggest a retest of the recent contract low of US$2.33 1/2, a market technician said. First resistance for December corn is seen at US$2.41 and then at US$2.44 1/2. First support is seen at US$2.37 1/4 and then at US$2.36.

Deliveries posted against September totaled 2,170 contracts. Large issuers included the customer account of Cunningham Commodities, which issued 379 contracts, the customer account of Shatkin, which issued 272 contracts and the house account of Shatkin, which issued 277 contracts. Large stoppers included the house account of Shatkin, which stopped 343 contracts, the customer account of Shatkin, which stopped 328 contracts and the customer account of Cunningham Commodities, which stopped 312 contracts. The last trade date assigned was Sep. 12.

Cash corn basis bids were unchanged to higher Wednesday. Central Illinois was 2 cents higher at 9 cents under the December.

In other corn news, corn futures on China's Dalian Commodity Exchange settled lower with the May contract RMB/3 lower at RMB1,403/tonne.

On Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report at 7:30 a.m. CDT.