November 22, 2006

 

CBOT Corn Outlook on Wednesday: Up 3-4 cents; following overnight strength

 

 

Chicago Board of Trade corn futures are expected to start trading 3-4 cents higher Wednesday following the strength in overnight activity, sources said.

 

The market will close at 12:00 p.m. CST Wednesday and will be closed Thursday in observance of Thanksgiving.

 

In overnight e-CBOT trading, December corn gained 4 1/2 cents to US$3.65 3/4 cents per bushel and March also rose 4 1/2 cents to US$3.81 3/4. e-CBOT volume in March was 8,210 contracts.

 

Seasonal trends helped the market trade higher Tuesday and technical and speculative buying supported prices overnight with the day session trading expected to be supported by these factors, a floor analyst said.

 

Seventy-six percent of the time the market has traded higher the day before Thanksgiving, he added. However, after the first half-hour, trading will be thin as people close up operations ahead of Thanksgiving, he said.

 

On day session open auction technical charts the bulls remain in technical control, a technical analyst said. The bulls' next upside price objective is closing prices above technical resistance at the contract high of US$3.72 per bushel. The bears' next near-term downside price objective remains closing prices below support at US$3.40. First resistance for December corn is seen at US$3.65 and then at US$3.72. First support is seen at Monday's low of US$3.57 1/2 and then at US$3.55.

 

Cash corn basis bids were unchanged to higher Wednesday. Peoria, Illinois was up 1 cent at 3 cents over the December future.

 

In other corn news, cash corn prices in China rose significantly in northern and central provinces in the week ended Wednesday as speculative buying supported prices, analysts said. Demand from processors and feed companies remained stable but corn prices soared due to speculative buying as grain traders rushed to buy corn ahead of an anticipated further rise in prices, said Wang Shiliang, a trader a Jilin Grain Center.

 

The Philippines seeks to become self-sufficient in corn production by 2008, producing at least 6.5 million metric tonnes annually, Philippine Agriculture Secretary Arthur Yap said Wednesday. To accomplish this goal, increased investment in post-harvest facilities will need to be made, he said.

 

South Korea's Korea Corn Processing Association or Kocopia, has purchased 110,000 metric tonnes of optional origin corn in a tender concluded Wednesday, association officials said. Delivery of the corn is scheduled for April.

 

India sold 20,000 metric tonnes of corn to Sri Lanka, for delivery in December, sources said. On Friday, Indian Commerce and Industry Minister Kamal Nath said the government may consider a ban of corn exports.

 

Corn futures on China's Dalian Commodities Exchange settled slightly lower. The most active September contract fell RMB/10 to RMB 1,698/tonne.

 

Due to the holiday, the weekly export sales report scheduled for Thursday will be released on Friday.