October 4, 2007

 

CBOT Corn Outlook on Thursday: Up 2-4 cents on bounce from recent losses

 

 

Chicago Board of Trade corn futures are expected to begin day time trading 2-to-4 cents higher Thursday on ideas the market is due for a bounce after recent sharp losses and spillover from an expected higher start in wheat and soybeans, analysts said.

 

In overnight electronic trading, December corn gained 4 1/4 cents to US$3.48 3/4 per bushel and March rose 4 cents to US$3.65. e-CBOT volume in December was 4,958 contracts.

 

Corn should open higher as the market is overdone to the downside and due for a correction, an analyst said. The market could also draw some support from an expected higher start in both wheat and soybeans, the analyst said.

 

Wheat is expected to open 10-15 cents higher with soybeans up 3-to-5 cents.

 

The market is at a price area where there has been good end user buying and this could support corn futures Thursday, a commission house analyst said.

 

However, corn is under pressure from a record crop produced and remains in its role of a follower of the other markets. If both wheat and soybeans rally, corn will follow but without any outside influence, the market will struggle with price direction, the commission house analyst said.

 

The U.S. Department of Agriculture reported weekly corn export sales were 1.151 million metric tonnes for the week ended Sept. 27, within the 800,000-1.3 million tonnes expected by analysts.

 

Wet weather may lead to harvest delays in the western U.S. Midwest in the next several days, DTN Meteorlogix Weather said.

 

In the western U.S. Midwest there is a chance for showers and thunderstorms from Friday into Monday, with amounts of .30-1.00 later in the period. Temperatures are expected to average above to well above normal for most of the period.

 

In the eastern U.S. Midwest, mainly dry weather is forecast through Sunday with scattered showers developing Monday or Tuesday, Meteorlogix said. Temperatures are expected to average well above normal in the period.

 

On daily open auction technical charts, December corn closed lower Wednesday and hit a fresh three-week low, a market technician said. Serious chart damage has been made this week to suggest that more downside potential exists in the near term. The next downside price objective for market bears is to close prices below solid support at the September low of US$3.35 1/2. The bulls' next upside price objective is to close prices above solid resistance at US$3.650.

 

First resistance for December corn is seen at US$3.50, and then at US$3.51 1/4, Wednesday's high. First support is seen at US$3.42 1/4, Wednesday's low and then at US$3.40.

 

In other corn news, corn futures on China's Dalian Commodities Exchange remained closed due to the National Day holiday.