December 14, 2007

 

CBOT Corn Outlook on Friday: Up 2-3 cents; technical momentum to lead higher

 

 

Corn futures on the Chicago Board of Trade are poised for a higher start to day session trading Friday, with bullish technical momentum seen leading prices higher, analysts said.

 

Analysts expect corn to open 2 to 3 cents higher.

 

In overnight electronic trading, December corn was 2 1/4 cents higher at US$4.21, and March corn was 2 1/4 cents higher at US$4.37 1/4.

 

The technical trend continues to limit sellers, with supportive news on the passage of the energy bill, solid underlying demand and dryness concerns for Argentina, the market is seen starting on firm footing, analysts said.

 

However, traders said the market remains overbought and with a higher U.S. dollar index Friday coupled with lower outside metal futures, the opportunity for end of week profit taking may emerge in the absence of any other fresh supportive news, analysts added.

 

A technical analyst said corn bulls have the solid near-term technical advantage, amid no signs of a market top being close at hand. A two-month-old uptrend is in place on the daily bar chart, he said. However, the market is still short-term overbought, technically, and a downside correction is due very soon, he added. The next upside price objective for March corn is to push and close prices above solid technical resistance at the contract high of US$4.39 a bushel. The next downside price objective is to push prices below solid support at US$4.10.

 

First resistance for March corn is seen at US$4.39 and then at US$4.45. First support is seen at Thursday's low of US$4.29 and then at US$4.25.

 

The U.S. Department of Agriculture announced Friday private export sales of 158,496 metric tonnes of corn for delivery to Japan in the 2007-08 marketing year.

 

December corn deliveries totaled 2,288 lots. Issuers and stoppers were scattered among various commission houses. The last trade date assigned was December 13.

 

Friday is the last trading day for December corn futures.

 

The U.S. Senate on Thursday voted to pass a new scaled back energy bill, providing new fuel-efficiency standards. Also under the legislation, 36 billion gallons of so-called renewable fuel would be blended into the fuel supply by 2022. Of the 36 billion gallons, 21 billion gallons would have to come from sources other than corn, such as wood chips.

 

The DTN Meteorlogix Weather Service said it was another hot day in Argentina on Thursday before thunderstorms broke. The storms appeared to be heavier and more widespread than expected. This should help to ease dryness concerns, even in the west. Friday's long range charts also suggest a better chance for thundershowers but this outlook is somewhat uncertain, Meteorlogix added.