October 23, 2007

 

CBOT Corn Outlook on Tuesday: Up 2-3 cents on dollar weakness, outside markets

 

 

Chicago Board of Trade corn futures are predicted to begin trading 2-to-3 cents higher Tuesday, as a weaker U.S. currency and stronger outside markets are expected to underpin futures on the opening, an analyst said.

 

In overnight electronic trading December corn rose 3 cents to US$3.67 1/2 per bushel and March also gained 3 cents to US$3.84. E-CBOT volume in December was 2,060 contracts.

 

The market should start out higher with several outside inlationary markets stronger and the dollar lower against several other currencies, an analyst added. Corn started to firm in Monday's late trade and the trend continued in overnight activity and looks to remain in day session trade despite the lack of fresh positive news, the analyst said.

 

Monday afternoon's crop progress report was in line with analysts' expectations and remains above last year's pace and the five year average and should have little overall impact on the market, a trader said.

 

The U.S. Department of Agriculture reported that 60% of the U.S. corn crop was harvested as of Oct. 21, above the 51% cut in 2006 and the five-year average of 55%. Illinois was 92% harvested, well above the average of 75% while Iowa reported 41% of the crop combined, below last year's 46% and the five-year average of 49%.

 

Although Iowa is behind its average, harvest activity should see good progress this week, said Farm Futures Daily analyst Arlen Suderman in a note to clients this morning.

 

In the U.S. Midwest mainly dry weather is forecast through Thursday, DTN Meteorlogix Weather said. Temperatures are forecast to average below normal Tuesday and Wednesday and near-to-below normal Thursday.

 

In the eastern U.S. Midwest, mainly dry weather is forecast for Wednesday with dry conditions or only a few light showers in southern areas on Thursday. Temperatures are expected to average below normal Tuesday and Wednesday and near-to-below normal Thursday, Meteorlogix said.

 

On daily open auction technical charts, December corn closed nearer the session high after coming under string selling pressure early on, a technical analyst said. No chart damage occurred Monday and bulls still have an uptrend in place from the October low. The bulls' next upside price objective is to push prices above solid resistance at last week's high of US$3.71, with the bears' next objective closing prices below solid support at US$3.50.

 

First resistance for December corn is seen at Monday's high of US$3.66 3/4 and then at US$3.71. First support is seen at US$3.59 and then at US$3.55.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled slightly lower with the benchmark May contract down RMB1 at RMB1,642/tonne.