November 15, 2006

 

CBOT Corn Outlook on Wednesday: 1-2 cents higher on e-CBOT, follow-through

 

 

Chicago Board of Trade corn futures are expected to begin trading 1 to 2 cents higher Wednesday, following the firm tone in overnight trading and follow-through from Tuesday's sharp gains, floor sources said.

 

In overnight e-CBOT trading, December corn rose 1 3/4 cents to US$3.59 1/2 cents per bushel, and March also gained 2 1/4 cents to US$3.73 3/4. e-CBOT volume in December was 12,920 contracts.

 

Corn should begin trading to the upside following the higher prices overnight and the rally on Tuesday, a floor analyst said. There was little fresh news out overnight but the key remains the speculative money and what it wants to do, he added.

 

Tuesday, the agricultural markets saw new investments come into the market and there should be some follow-through Wednesday, said Don Roose, president of U.S. Commodities in West Des Moines, Iowa. "It's a technical challenge to the upside," he said.

 

In addition, the corn market remains nervous. The crop's yield is uncertain, there's no proof that the higher prices have shut down or slowed down export demand, and farmers continue to be slow sellers of corn, he said

 

On day session open auction technical charts, bulls flexed their muscles Tuesday after recent profit-taking and are back in control of the corn market, a technical analyst said. The next upside objective is closing prices above resistance at the contract high of US$3.67 per bushel. The bears' near-term downside price objective is closing prices below solid support at US$3.40.

 

First resistance for December corn is seen at Tuesday's high of US$3.61 1/2 and then at US$3.67 per bushel. First support is pegged at US$3.50 and then at Tuesday's low of US$3.41 1/2.

 

Cash corn basis bids were mixed Wednesday. Peoria, Ill., was up 3 cents at 2 cents over the December future.

 

In other corn news, cash corn prices in China's major producing areas drifted slightly higher in the week ended Wednesday, sources said. Processor buying and the absence of farmer selling sent prices higher, analysts said.

 

Corn futures on China's Dalian Commodities Exchange settled higher on rising domestic market prices and firm CBOT prices, sources noted. The May contract rose RMB20 to RMB 1,577/tonne.

 

South Korea's Major Feedmill Group bought 55,000 metric tonnes of optional-origin corn, sources said.