November 13, 2007

 

CBOT Corn Outlook on Tuesday: Up 2-3 cents on consolidation, weaker dollar

 

 

Chicago Board of Trade corn futures are predicted to begin day time trading 2-to-3 cents higher Tuesday as ideas that recent losses were overdone and due for a corrective bounce and a weaker U.S. dollar are expected to supply support to prices, analysts said.

 

In overnight electronic trading, December corn gained 2 3/4 cents to US$3.81 3/4 per bushel and March rose 3 cents to US$3.99. E-CBOT volume in December was 5,677 contracts.

 

Corn should bounce back and trade to the upside at the opening, an analyst said. Although there is not a lot of fresh inputs to trade and crude oil and gold are lower, the market is due for a bounce higher on position squaring after recent weakness, the analyst said.

 

Most of the outside markets are weaker but the dollar is lower and price direction on corn is "all about the dollar," a commission house analyst said. When the dollar is higher corn is weaker and when it's weaker, corn is higher.

 

Additional support could be generated from spillover from a stronger start in soybean futures, a trader said. Soybeans are called to open 10-to-12 cents higher and could influence corn prices, the trader said.

 

On daily open auction technical charts, December corn ended lower and near session lows as declines posted in "outside" markets pressured prices with profit- taking adding to the losses, a technical analyst said. No major chart damage occurred but strong follow through selling Tuesday will likely produce near-term technical damage. The bulls' next upside price objective remains closing prices above solid resistance at US$3.90 1/2, last week's high. The next downside price objective for the bears is to push prices below support at US$3.70.

 

First resistance for December corn is seen at US$3.82, Monday's high and then at US$3.86. First support is seen at US$3.77 1/2 and then at US$3.75.

 

In other corn news, 2007 Philippine corn production corn will reach 6.9 million metric tonnes, up 13% from 2006, barring any late season weather issues, a senior agriculture official said Tuesday.

 

Corn futures on China's Dalian Commodities Exchange settled slightly lower with the benchmark May contract down RMB8 to RMB1,768/tonne.

 

Tuesday, the U.S. Department of Agriculture is scheduled to release the weekly export inspections at 1100 EST and the weekly crop progress at 1600 EST. The reports were delayed a day due to the holiday.