November 29, 2006

 

CBOT Corn Outlook on Wednesday: Down 5-7 cents, following e-CBOT weakness

 

 

Chicago Board of Trade corn futures are predicted to start trading 5 to 7 cents lower Wednesday, following lower prices in overnight trading and expected month-end profit taking, sources said.

 

In overnight e-CBOT trading, December corn fell 7 1/2 cents to US$3.61 1/4 cents per bushel and March declined 6 3/4 cents to US$3.78. e-CBOT volume in March was 9,836 contracts.

 

The market should see some follow through weakness from the overnight session with the funds expected to take some profits before the end of the month, a floor analyst said. The corn market is overdue for a correction, he added.

 

Concerns about a recent bird flu outbreak in South Korea was also cited by a floor source as a potential negative for the market, but noted that bird flu "is a reality" and not expected to have a long-lasting impact on the market.

 

The market is overbought and should see some booking of profits, the source added.

 

Since Sept. 15, March corn has rallied almost US$1.30 per bushel, based on Tuesday's close.

 

On day session open auction technical charts the bulls remain technical control of the corn market though the end-of-the month could feature some profit-taking pressure, a market technician said.

 

First resistance for March corn is seen at the contract high of US$3.91 3/4 and then at US$3.95. First support is seen at Tuesday's low of US$3.80 1/2 and then at US$3.75.

 

Cash corn basis bids were unchanged to mostly higher Wednesday. Peoria, Illinois was unchanged at 1 cent under the December future.

 

In other corn news, cash corn prices in China rose in the week ended Wednesday as processors increased bids to ensure corn supplies, analysts said.

 

Demand is expected to rise over the next several weeks as state warehouses and grain traders are expected to start buying soon, analysts said. However, corn prices are not expected to increase significantly because supplies will also rise, sources said.

 

Chinese traders are expected to export less corn in November and December than earlier expected because of slower than expected supplies of domestic corn, a report by the commodities analysis form JCI Shanghai said Wednesday.

 

South Korea's Major Feedmill Group bought 55,000 metric tonnes of optional-origin corn from Marubeni, a trader in Seoul said Wednesday.

 

In another tender, South Korea's Nonghyup Feed Inc. purchased 165,000 metric tonnes of optional-origin corn in a tender concluded late Tuesday, a company official said Wednesday.

 

The recent outbreak of bird flu in South Korea will impact India's soymeal exports only if the disease is widespread and continues for an extended period of time, a senior Indian industry official said Wednesday.

 

Corn futures on China's Dalian Commodities Exchange ended lower, pressured by the recent outbreak of bird flu in South Korea, analysts said. The benchmark May contract declined RMB/22 to RMB 1,605/tonne.