November 26, 2007

CBOT Corn Outlook on Monday: Up 3-5 cents on firm outside markets, weak dollar

Chicago Board of Trade corn futures are expected to begin trading 3-to-5 cents higher Monday as stronger prices in "outside" inflationary markets and a weaker U.S. currency are expected to support prices at the opening, analysts said.

In overnight electronic trading, December corn rose 4 1/2 cents to US$3.93 1/2 per bushel and March ended up 4 3/4 cents to US$4.10 1/2. E-CBOT volume in March was 5,059 contracts.

Corn's price direction will be determined by what the outside markets are doing when the grain markets open, a commission house analyst said. If gold, silver and crude oil are all higher than corn will open higher as well, the analyst said. In addition, the dollar is weaker and that will also provide underlying support for prices, the analyst said.

The market will also look to soybeans for price direction, a trader said. As long as soybeans go higher, corn will follow as corn prices have to remain competitive with soybeans to encourage corn acreage this spring, the trader said. Nearby soybeans rallied to multi-decade highs on Friday. Beyond the soybean strength and the gains in the outside markets, there is little fresh news out, the trader added. Soybeans are expected to open 8-to-12 cents higher.

On daily open auction technical charts, March corn futures gapped higher on the daily bar chart, closed near the session high and at the weekly high close. Market bulls gained solid upside technical momentum Friday, a technical analyst said. The upside objective is closing prices above solid resistance at US$4.07 1/2 per bushel, the November high. The next downside price objective for the bears remains pushing prices below solid support at US$3.91 1/2.

First resistance for March corn is seen at US$4.07 1/2 and then at US$4.15. First support is seen at Friday's low of US$4.01, and then at US$3.99 1/4.

In other corn news, corn futures on China's Dalian Commodities Exchange settled higher with the benchmark May contract up RMB13 to RMB1,800/tonne.

Monday, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 11:00 EST.