September 27, 2006

 

CBOT Corn Outlook on Wednesday: Slightly higher on technicals, e-CBOT

 

 

Chicago Board of Trade corn futures are expected to begin Wednesday's day session trading 1/2 to 1 cent higher, underpinned by firm prices overnight and a supportive technical picture, sources said.

 

In overnight e-CBOT trading, December corn gained 1 cent to US$2.60 per bushel and March added on 1 1/2 cents to US$2.74 1/4. e-CBOT volume overnight in December was 5,472 contracts.

 

The recent strength in corn has been technically based and looks like it will continue Wednesday, a commission house analyst said. There isn't much in the way of fresh news and firm wheat futures could also provide some support for corn, he added.

 

Friday's quarterly grain stocks report is not a major report but it should be mildly supportive and the market could draw some support from position squaring ahead of it, he noted.

 

In a Dow Jones Newswire survey of 14 analysts, the average quarterly stocks estimate for the fourth quarter was 1.967 billion bushels, below the 2.012 ending stocks figure in the Sept. 12 U.S. Department of Agriculture supply and demand report.

 

The market reached some technical objectives overnight and should continue to be supported technically, a market analyst said. Harvest activity continues but moisture levels in corn are still high with some producers letting the corn dry down on the fields. The weather forecasts for this time of year are nothing out of the ordinary, he added.

 

In the western U.S. Midwest there is a chance for light showers on Wednesday with mainly dry conditions on Thursday and Friday, DTN Meteorologix Weather said. Temperatures are expected to average below normal.

 

In the eastern U.S. Midwest, light showers are possible Wednesday into Thursday with amounts from 0.25-0.75 inch. Dry weather returns on Friday. Temperatures will average near to above normal Wednesday, near to below normal on Thursday and below normal Friday, DTN Meteorologix Weather said.

 

On technical charts, December corn hit a fresh six-week high as the bulls are showing an impressive rally right during the U.S. harvest, a technical analyst said. The next upside objective for the bulls is closing prices above solid resistance at Tuesday's high of US$2.60. First resistance for December corn is seen at US$2.60, and then at US$2.62. First support is seen at US$2.56, and then at US$2.52 1/2, this week's low.

 

Cash corn basis bids were mixed Wednesday morning, with central Illinois unchanged at 5 cents under the December future.

 

In other corn news, corn futures on China's Dalian Commodity Exchange settled higher with the May contract up RMB/3 at RMB1,400/tonne.