November 16, 2005

 

CBOT Corn Outlook on Wednesday: Steady, flat, searching for direction

  

 

Corn futures at the Chicago Board of Trade are expected to begin Wednesday's open auction session at steady levels with the market searching for fresh news as futures are expected to remain within recent tight trading ranges, traders said.

 

In overnight e-CBOT trading, December corn edged 1/4 cent higher to US$1.96 per bushel, March gained 1/4 cent to US$2.10 1/4, and May rose 3/4 cent to US$2.18 3/4 per bushel.

 

"There is not a lot of fresh news this morning and it will be tough to generate any upward momentum," a floor trader said.

 

The cash basis has been strong, but farmers remain tight holders of corn. Technically the market has failed to push December corn above the US$1.99 1/2 level and corn prices were lower in China overnight, probably on bird flu concerns he added.

 

China has confirmed the country's first three human cases of bird flu. Two cases were confirmed in the province of Hunan in central China with the third case in Anhui, the Xinhua News Agency reported.

 

Corn futures on China's Dalian Commodity Exchange ended moderately lower with the most active May contract down RMB16/tonne to RMB1,238/tonne.

 

On technical charts, first resistance for March corn is seen at US$2.12, Tuesday's high and then at US$2.13 1/4, this week's high. First support is pegged at US$2.09 3/4, Tuesday's low and then at US$2.07 1/2, the contract low.

 

Cash corn basis bids were unchanged to higher Wednesday morning. Central Illinois was unchanged at 5 cents over December futures, while St. Louis was 3 cents higher at 11 cents over December futures.

 

In other corn news, China's corn prices declined modestly in the week ended Wednesday, continuing a fall that started 2 weeks ago on bird flu concerns, sources said.

 

Through Wednesday, the country has reported 11 bird flu outbreaks since October, arousing local market concerns that the disease could negatively impact the poultry industry, and in turn the feed industry.

 

The Canadian International Trade Tribunal, or CITT, ruled Tuesday that unprocessed U.S. corn coming into Canada hurts Canada's domestic industry, but U.S. corn that is processed does not.

 

The U.S. Corn Refining Association said Tuesday that is was disappointed by a recent decision by the Mexican government to keep a tax on beverages made with sweeteners other than can sugar. The association noted that the 20% tax on sweeteners such as high fructose corn syrup was against the recent ruling by the World Trade Organization, which said the tax violates global trade rules.