October 24, 2006

 

CBOT Corn Outlook on Tuesday: Steady to 1 cent higher start seen

 

 

Chicago Board of Trade corn futures are forecast to begin trading steady to 1 cent higher Tuesday, following Monday's gains and modestly higher prices in overnight trading activity, sources said. In overnight e-CBOT trading, December corn rose 1 cent to US$3.19 1/4 cents per bushel and March rose 1 1/2 cents to US$3.31 3/4. e-CBOT volume in December was 5,154 contracts.

 

Corn should see a two-sided trading affair, a commission house analyst said. There could some profit taking after Monday's gains as it occurred on low volume he said. However, people want to be long on this second leg of the rally so it might be hard for the market to have much downward momentum, he added.

 

The market could see some support from the continued slow harvest pace, but the forecast indicates good harvest weather after the next several days, so that could offset those ideas, a floor analyst said.

 

The U.S. Department of Agriculture reported Monday that 53% of the U.S. corn crop was harvested as of Oct. 22, below the 63% combined last year at this time and the five-year average of 57%. Analyst's had expected 50%-54% of the crop to be combined.

In Iowa, 48% of the crop was harvested, versus 57% in 2005 and the five-year average of 49%. In Ohio, 18% of the crop has been harvested compared to 40% last year and the five-year average of 36%.

 

In the western U.S. Midwest, mainly dry conditions on Wednesday will give way to possible rain Wednesday night into Thursday in southern and east-central areas, with amounts of 0.30-1.00 and locally heavier, DTN Meteorologix Weather said. Mainly dry conditions are expected Friday and Saturday.

 

In the eastern U.S. Midwest, rain and possible thunderstorms are possible Wednesday night through Friday. Rainfall potential is 0.50-1.50 inches and locally heavier. The heaviest of this activity may favor the southern and eastern areas, Meteorologix said.

 

On day session open auction technical charts, December corn futures scored an "outside day" up on the daily bar chart Monday on fresh fund buying, a technical analyst said. The bull's next upside price objective is closing prices above solid resistance at US$3.25 per bushel. The bear's next near-term downside price objective is closing prices below solid support at US$3.00, the analyst said. First resistance for December corn is seen at US$3.20 1/4 and then at US$3.25. First support is seen at US$3.15 and then at US$3.11 1/2. Corn basis bids were unchanged to higher Tuesday. Central Illinois was unchanged at 6 cents over the December future.

 

In other corn news, Taiwan is tendering for 60,000 metric tonnes of U.S. corn Wednesday, sources said.

 

Corn futures at China's Dalian Commodities Exchange settled higher. The May contract rose RMB/11 to RMB 1,476/tonne.