October 9, 2007

 

CBOT Corn Outlook on Tuesday: Mixed; two-sided trade seen

 

 

Chicago Board of Trade corn futures are predicted to begin trading mixed Tuesday as a lack of news could lead the market to trade on both sides of Monday's settlement prices, analysts said.

 

In overnight electronic trading, December corn slipped 1/4 cent to US$3.39 1/2 per bushel and March ended unchanged at US$3.56 1/4. E-CBOT volume in December was 3,394 contracts.

 

There was little news out overnight and corn should trade both sides, consolidating ahead of Friday's U.S. Department of Agriculture's crop production and supply/demand reports, an analyst said.

 

Monday corn slipped on spillover selling from wheat and soybeans and price direction could be determined by what the other grains do Tuesday, an E-CBOT trader said.

 

The dollar is stronger, which could limit buying interest, but corn has fallen sharply over the past two weeks and with the report out on Friday, corn could see some support from short covering, the E-CBOT trader said.

 

Wet conditions in the western U.S. Midwest might limit harvest conditions in that part of the region over the next few days but there are no significant harvest concerns outside of this area, DTN Meteorlogix Weather said.

 

On daily open auction technical charts, December corn ended near session highs Monday after trading to a seven-week low early in the session on limit-down losses in wheat and sharply lower soybean prices, a technical analyst said. Recent chart damage suggests a bit more downside potential exists in the near-term. A drop to the US$3.30 area would be considered a "value buy" by traders, the analyst said. The next downside price objective for market bears is closing prices below solid support at US$3.35. The bulls' next upside price objective is closing prices above solid resistance at US$3.45.

 

First resistance for December corn is seen at US$3.40 and then at US$3.45. First support is seen at US$3.35, Monday's low and then at US$3.30.

 

Elsewhere, corn futures on China's Dalian Commodities Exchange settled higher, with the May contract up RMB9 at RMB1,664/tonne.

 

China said its 2008 import quotas for corn will remain unchanged at 7.2 million metric tonnes for the fifth consecutive year, according to a statement on the National Development and Reform Commission's web site.

 

Israel is tendering to buy 56,000 metric tonnes of U.S. corn.

 

Taiwan announced that it will temporarily allow feed corn imports from China to help stabilize local prices. The removal of the ban is effective through Mar. 31, 2008, according to a statement on the country's Ministry of Economic Affairs web site.

 

The USDA is scheduled to release the weekly export inspections report and the weekly crop conditions report at 1100 EDT and 1600 EDT respectively. The reports were delayed a day due to Monday's holiday.