November 21, 2007

 

CBOT Corn Outlook on Wednesday: 1-2 cents lower on profit-taking, weak e-CBOT

 

 

Chicago Board of Trade corn futures are expected to start trading 1 to 2 cents lower Wednesday, undermined by profit-taking after Tuesday's rally and following the weaker tone in overnight activity.

 

In overnight electronic trading, December corn slipped 1 cent to US$3.80 1/4 per bushel and March declined 1 1/4 cents to US$3.97. E-CBOT volume in March was 2,422 contracts.

 

Corn prices should start out on the defensive as Tuesday's gains were overdone and due for a pullback, a commission house analyst said. Participants are expected to take profits ahead of the holiday with some traders not expected to return until Monday. Unless crude oil breaks above US$100 per barrel, corn should be on the defensive, the analyst said.

 

Trading activity is expected to be light as the CBOT will close at 1 p.m. EST Wednesday and will be closed Thursday for Thanksgiving Day.

 

The market is expected to open weaker as crude oil has pulled back after hitting a new all-time high in overnight activity and gold prices have also come off their highs as well, limiting the impact of outside market influence, a trader said. In addition, the dollar is steady, limiting the impact of a weaker currency, the trader added.

 

On daily open auction technical charts, March corn futures closed higher Tuesday as a weaker U.S. dollar and stronger "outside" markets supported prices, a technical analyst said. The next upside objective for market bulls continues to be closing prices above major resistance at US$4.00 per bushel. The next downside price objective for the bears remains pushing prices below support at last week's low of US$3.91 1/2.

 

First resistance for March corn is seen at US$4.00 and then at US$4.03. First support is seen at US$3.95, Tuesday's low and then at US$3.93 1/2.

 

In other corn news, cash corn prices in China were higher in the week ended Wednesday on strong demand and limited supplies as poor weather hampered movement of corn, analysts said.

 

South Africa's corn yields for the 2007-08 crop year were 5.963 million metric tonnes, under 1 million metric tonnes short of the forecast of 6.902 million for the year, the South African Grain Information Service said Wednesday.

 

Corn futures on China's Dalian Commodities Exchange settled higher with the benchmark May contract up RMB13 to RMB1,736/tonne.