December 13, 2006

 

CBOT Corn Outlook on Wednesday: Down 2-4 cents on overnight weakness

 

 

Chicago Board of Trade corn futures are predicted to begin day session activity 2-to-4 cents lower Wednesday following weaker prices overnight and the absence of fresh news, sources said.

 

In overnight e-CBOT trading, December corn fell 3 3/4 cents to US$3.55 1/4 per bushel and March dropped 2 3/4 cents to US$3.70. e-CBOT volume in March was 11,866 contracts.

 

The market should start out weaker based off the overnight activity, a floor trader said. There was little in the way of fresh news out overnight so corn should start out on the defensive, he added.

 

Corn could see some position liquidation but it should be a range-bound, choppy affair, a commission house analyst said. It's near the end of the trading year and the holiday-market type trading should increase, another analyst said.

 

On day session open auction technical charts, the bulls near-term objective remains closing prices above US$3.80 per bushel, while the bear's downside objective is closing prices below support at US$3.60, a market technician said. Trading is likely to be choppy until year end with price action more sideways and less trending through the end of the year, the technician said.

 

First resistance for March corn is seen at US$3.76, Tuesday's high and then at US$3.80. First support is seen at US$3.70 and then at US$3.65.

 

Deliveries posted against the December contract totaled 890 contracts Wednesday. Large issuers included the customer account of JP Morgan, which issued 450 contracts and the house account of Tenco, which issued 143 contracts. Large stoppers included the house account of Henning Carey, which stopped 601 contracts and the customer account of Shatkin Arbor, which stopped 70 contracts. Preliminary open interest in December is 6,399 contracts. The last trade assigned was Dec. 11.

 

Corn basis bids were unchanged to mostly lower Wednesday morning. Central Illinois was down 1 cent at 3 cents under the March future.

 

In other corn news, active buying from corn processors in China as they looked to build inventories helped support corn prices in the week ended Wednesday, sources said. However, corn prices could see a correction after the recent price gains and the spot market could decline, a Chinese-based trader said.

 

Corn futures on China's Dalian Commodities Exchange ended lower on profit taking, sources said. The most active September contract fell RMB/11 to RMB 1,700/tonne.

 

On Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report for the week ending Nov. 7 at 7:30 a.m. CST.