November 1, 2006

 

CBOT Corn Outlook on Wednesday: 1-2 cents higher start expected

 

 

Chicago Board of Trade corn futures are forecast to begin Wednesday's day session trading 1-to-2 cents higher as the start of the new month is expected to bring in fresh buying interest from speculative interests, sources said.

 

In overnight e-CBOT trading, December corn rose 2 1/4 cents to US$3.23 cents per bushel and March also gained 2 1/4 cents to US$3.37. e-CBOT volume in December was 7,260 contracts.

 

The speculative trading funds could support the market as the new month begins, a commission house analyst said. In addition, the market could be supported by a "dead cat bounce" after Tuesday's losses. There was little fresh news overnight in corn and trading could be quiet, he added.

 

Corn was pounded pretty hard Tuesday and it could see a bounce early, said Don Roose, president of US Commodities in West Des Moines, Iowa. The market is up against the harvest, which is in full swing, and if fund buying is absent and producer selling picks up, corn could work its way lower, he added.

 

Weather favorable for harvesting is expected over the next several days in both the western and eastern U.S. Midwest, DTN Meteorologix Weather said.

 

Mostly dry weather is expected through Thursday with only a few light showers in the western U.S. Midwest forecast on Friday, Meteorologix Weather said.

 

In the eastern U.S. Midwest, mainly dry conditions are forecast through Friday and with only a few light showers expected over the weekend in the western section of the region, DTN Meteorologix Weather said. Temperatures across the entire U.S. Midwest are expected to average well below normal during the next several days.

 

On day session open auction technical charts, no serious chart damage occurred Tuesday in December corn after end-of-month profit taking on Tuesday, a technical analyst said. The bulls technical objective is still closing prices above longer-term technical resistance at US$3.35 1/4 a bushel. The bears' next near-term downside price objective is closing prices below solid support at US$3.15. First resistance for December corn is seen at US$3.26 3/4 and then at US$3.30. First support is seen at US$3.20, and then at US$3.15.

 

Cash corn basis bids were mixed Wednesday. Central, Illinois was unchanged at 10 cents over the December future.

 

In other corn news, South Korea's Nonghyup Feed Inc. or NOFI bought 85,000 metric tonnes of corn in a tender concluded Tuesday, sources said. 55,000 tonnes is optional-origin and 30,000 tonnes is from China, sources added. Delivery is scheduled for March.

 

Cash corn prices were stable in China in the week ended Wednesday, though demand is expected to increase over the next two weeks as grain traders and state warehouses start buying, analysts said. This year's corn prices are than the same time last year on rising industrial demand, analysts said.

 

Corn futures at China's Dalian Commodities Exchange ended lower following the weakness in CBOT corn futures and domestic harvest pressure, analysts said. The May contract fell RMB/7 to RMB 1,471/tonne.