October 19, 2007

 

CBOT Corn Outlook on Friday: 1-2 cents higher on outside markets, technicals

 

 

Chicago Board of Trade corn futures are predicted to begin trading 1 to 2 cents higher Friday as stronger outside markets in overnight activity and technical strength is expected to underpin corn futures at the opening of day time trading, analysts said.

 

In overnight electronic trading December corn rose 2 cents to US$3.69 1/4 per bushel and March gained 1 1/2 cents to US$3.85. e-CBOT volume in December was 3,692 contracts.

 

The outside markets are expected to support corn futures, an analyst said. Crude oil futures made another all-time high in overnight trade, and the dollar reached new lows against the euro Thursday and the dollar index is weaker in early trading.

 

Technically, corn is very strong and speculative money is moving the market due to the strength in commodities in general, a trader said. In addition, corn could also draw support from wheat futures which rallied sharply in overnight activity, the trader said.

 

In overnight trade, December wheat futures ended 13 1/4 cents higher at US$8.38 3/4.

 

Current fundamentals are taking a back seat to the technical picture and interest in commodities from speculative interests, another analyst said.

 

On daily open auction technical charts, December corn gapped open higher on daily open auction technical charts and hit a fresh three-week high. The bull's next upside price objective is to push prices above solid resistance at US$3.68 per bushel, which is the top of a big downside price gap on a daily bar chart. The next downside objective for bears remains closing prices below solid support at US$3.50 per bushel.

 

First resistance for December corn is seen at US$3.68 and then at US$3.72. First support is seen at Thursday's low of US$3.62 1/2 and then at US$3.60.

 

Mostly dry weather is expected in much of the U.S. Midwest over the weekend, with only a chance for showers to developing in western sections of the region on Sunday, DTN Meteorlogix Weather said.

 

There is a chance for rain in parts of the western U.S. Midwest on Monday and Tuesday with light-to-moderate showers in portions of the eastern section of the region early next week. Temperatures are expected to average above normal across the entire region Saturday and Sunday, Meteorlogix Weather said.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled higher with the benchmark May contract up RMB16 at RMB1,659/tonne.

 

Friday afternoon the Commodity Futures Trading Commission is scheduled to release the weekly commitment of Traders report for the period ending Oct. 16. Monday the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 11:00 a.m. EDT and the weekly crop progress report at 4:00 p.m. EDT.