December 12, 2006

 

CBOT Corn Outlook on Tuesday: Up 3-4 cents, following e-CBOT gains

 

 

Chicago Board of Trade corn futures are forecast to start 3 to 4 cents higher Tuesday on follow through from strength from the overnight session, sources said.

 

In overnight e-CBOT trading, December corn gained 4 cents to US$3.59 1/2 per bushel and March rose 3 cents to US$3.73 3/4. e-CBOT volume in March was 5,122 contracts.

 

Corn should start out higher following strength in overnight trading, a commission house analyst said. The market is short term oversold and people want to buy it at levels below the previous highs. The absence of some market participants as they wind down their operations as the year cones to a close may magnify the activity, he added.

 

Corn has had its largest correction since August and futures are now consolidating, said Brian Hoops, president of Midwest Market Solutions in a note to clients Tuesday. In addition, it appears that demand for U.S. corn has recently strengthened, he added.

 

On day session open auction technical charts, futures closed near the session high after dipping to three-week lows early in Monday's session, a technical analyst said. The bull's next upside price objective remains closing prices above resistance at US$3.80 per bushel in March futures. The bear's next near-term downside price objective is closing prices below US$3.60.

 

First resistance for March corn is seen at US$3.74 1/2 and then at US$3.80. First support is seen at Monday's low of US$3.63 1/2 and then at US$3.60.

 

Deliveries posted against the December contract totaled 264 contracts Tuesday. Large issuers included the house account of Fortis, which issued 150 contracts and the customer account of Kottke, which issued 56 contracts. Large stoppers included the house account of ADM Investor Services, which stopped 180 contracts. Preliminary open interest in December is 7,513 contracts. The last trade assigned was Dec. 7.

 

Corn basis bids were unchanged to mostly lower Tuesday morning. Central Illinois was unchanged at 2 cents under the March future.

 

In other corn news, Taiwan's Member Feed Industry Group, or MFIG, bought 60,000 metric tonnes of U.S. origin corn from Cargill in a tender concluded Tuesday, a Taipei-based trader said Tuesday.

 

The U.S. Department of Agriculture reported Tuesday that South Korea bought 220,000 metric tonnes of U.S. corn for delivery in 2006-07 and Egypt bought 120,000 tonnes for delivery in 2006-07.

 

Corn futures on China's Dalian Commodities Exchange settled higher with the most active September contract up RMB/27 at RMB 1,711/tonne.