September 26, 2007

 

CBOT Corn Outlook on Wednesday: Down 1-2 cents on weaker overnight trade, harvest

 

 

Chicago Board of Trade corn futures are expected to start trading 1-to-2 cents lower Wednesday as weaker prices in overnight trading and harvest related hedge pressure is expected to weigh on prices at the opening, analysts said.

 

In overnight electronic trading, December corn fell 1 cent to US$3.70 3/4 per bushel and March declined 1 1/2 cents to US$3.85 3/4. E-CBOT volume in December was 7,518 contracts.

 

The market should start out weaker following the tone established in overnight trading and expected hedge pressure as U.S. producers harvest what is expected to be a record U.S. corn crop, a commission house analyst said.

 

Trading could be two-sided, as an expected stronger start in wheat futures may limit the downside in corn, the analyst said. Wheat futures scored good gains in overnight activity and are expected to open 8-to-10 cents higher as continued concerns about dry weather in Australia and good export demand for U.S. wheat is expected to underpin prices.

 

In overnight trade, December wheat rose 10 1/2 cents to US$8.97 3/4.

 

There's little fresh news out with only Thursday's export sales report and Friday's Quarterly Grain stocks reports to influence market direction this week should trading could be slow, a floor trader said.

 

The average quarterly stocks estimate for the fourth quarter of 2006-07 crop year was 1.147 billion bushels, according to a survey of 12 analysts, compared to the 1.142 billion bushel carry over estimated by the U.S. Department of Agriculture in the Sept. 12, supply and demand report.

 

The Quarterly Grain stocks report is scheduled for release Friday at 8:30 a.m. EDT (1230 GMT).

 

On daily technical charts, December corn closed near the session low Tuesday on light profit-taking and continued harvest pressure, a technical analyst said. Corn bulls' next upside objective continues to be to close prices above solid resistance at this week's high of US$3.80 per bushel. The bears' next downside objective is closing prices below solid support at US$3.65 per bushel.

 

First resistance for December corn is seen at US$3.75 1/2, Tuesday's high and then at US$3.80. First support is seen at US$3.70 3/4 and then at US$3.66.

 

In other corn news, cash corn prices in China were mixed in the week ended Wednesday, with prices in producing regions lower and higher in non-producing regions higher on tight supplies, analysts said. China is likely to auction at least 1 million metric tonnes of corn from government stocks and along with harvest pressure in October will likely keep prices consolidating, analysts said.

 

Corn futures on China's Dalian Commodities Exchange settled higher with the May contract up RMB/21 at RMB1,645 per metric tonne.