November 3, 2006

 

CBOT Corn Outlook on Friday: Lower start expected, following e-CBOT

 

 

Chicago Board of Trade corn futures are expected to begin trading Friday 2-to-4 cents lower following weaker prices overnight as profit taking after the jump this week to 10-year highs and ahead of the weekend are expected to weigh on prices, sources said.

 

In overnight e-CBOT trading, December corn fell 3 1/4 cents to US$3.41 1/2 cents per bushel and March declined 4 1/2 cents to US$3.54 3/4. e-CBOT volume in December was 9,934 contracts.

 

Corn should begin lower on the weaker prices overnight and profit taking after Thursday's rally to levels not seen in a decade, a floor analyst said.

 

Nearby corn rallied to its highest level since September of 1996 in heavy volume with preliminary corn volume at a record 412,155 contracts.

 

The market is overdone and due for a pullback, a commission house analyst said. There is little fresh news out, it's the end of the week and participants are likely to take some profits after this week's rally, he added.

 

On day session open auction technical charts, December corn gapped open higher and the market is still technically strong with the bulls next upside price objective closing prices above longer-term technical resistance at US$3.59 per bushel, a technical analyst said. The bear's near-term downside technical objective is closing prices below solid-support at US$3.25, he noted.

 

First resistance for December corn is seen at US$3.50 and then at the contract high of US$3.53 1/2. First support is pegged at US$3.40 and then at US$3.34, the bottom of Thursday's big upside price gap on the daily chart, the technician said.

 

Corn basis bids are mixed Friday morning with Central Illinois unchanged at 10 cents over the December future.

 

The U.S. Department of Agriculture announced that over 105,000 metric tonnes of corn has been sold to Japan for delivery in 2006-07.

 

In other corn news, South Korea purchased 220,000 metric tonnes of US corn for delivery next year and 110,000 tonnes of optional origin corn for delivery next year, sources said. The corn purchase of 220,000 tonnes is expected to be divided into four shipments of up to 55,000 tonnes each, with the optional origin corn expected to be delivered in the second quarter of 2007, sources added.

 

Corn futures at China's Dalian Commodities Exchange settled higher on fresh buying and gains in CBOT futures, sources said. The May contract gained RMB/5 to RMB 1,493/tonne.

 

Friday afternoon the Commodity Futures Trading Commission is scheduled to release the commitment of traders report for the period ending Oct. 31.