October 26, 2005

  

CBOT Corn Outlook on Wednesday: Flat-1 cent lower, following overnight

  

 

Corn futures at the Chicago Board of Trade are expected to begin open auction trading flat to down 1 cent Wednesday, continuing in its recent role as a follower as the market contends with harvest pressure in the absence of fresh news, sources said.

 

In overnight e-CBOT trading, December corn slipped 1/2 cent to US$1.99 cents per bushel, March corn ended unchanged at US$2.12 3/4 per bushel, and May corn fell 1/2 cent to US$2.20 3/4 cents per bushel.

 

"Corn should continue to trade both sides in choppy activity," a floor analyst said. There is no fresh news out, the harvest continues and the market keeps searching for a bottom, he added.

 

Concerns over the impact of bird flu might have on demand also is a limiting factor, traders said. Overnight, China reported another case of bird flu.

 

The market continues to inch its way lower, setting new life of contract lows almost every day as the market struggles to come to grips with the second largest corn crop on record with demand for U.S. corn currently below what is needed to reach the U.S. Department of Agriculture's projection.

 

Continued favorable harvest weather is expected over the next several days across much of the U.S. Midwest, allowing producers to continue their harvest of the remainder of the soybean crop while continuing their harvest of the corn crop.

 

DTN Meteorlogix weather forecast mostly dry weather in much of the U.S. Midwest through Friday, with temperatures average to below normal.

 

Technical analyst Jim Wyckoff sets first resistance for December corn at US$2.00 1/2 - Tuesday's high - and then at US$2.01 1/2, this week's high. He sets first support at US$1.98 3/4, the contract low and then at US$1.97.

 

Corn basis bids were mixed Wednesday morning. Central, Ill. jumped 23 cents higher to 10 cents under December, while St. Louis rose 6 cents, to 6 cents over December futures.

 

Preliminary corn futures open interest set another record Tuesday. The CBOT reported preliminary open interest rose 14,752 contracts to 827,308 contracts.

 

In other corn news, China's cash corn prices were mostly steady in the week ended Wednesday. However, traders said prices are headed for a decline with the arrival of the new crop and reports of bird flu outbreaks, which may dampen demand.

 

Corn futures on China's Dalian Commodity Exchange finished mixed Wednesday with the most-active January contract slipped RMB3/tonne to RMB1,228/tonne.