December 18, 2007

CBOT Corn Outlook on Tuesday: 2-3 cents lower following weaker overnight trade

Chicago Board of Trade corn futures are predicted to start day session trading 2-to-3 cents lower Tuesday, following the weaker tone established in overnight trade with the absence of fresh news also expected to limit the upside, an analyst said.

In overnight electronic trading, March corn fell 3 1/2 cents to US$4.35 1/4 per bushel. E-CBOT volume in March was 4,360 contracts.

Corn should begin day session trading weaker, following the tone set in overnight trading, an analyst said. Fundamentally the market is overvalued, but there remains interest in investing in commodities. If speculative interests continue to buy the grains, corn could trade higher, the analyst said.

The market could be in for some profit taking, a floor trader said. Corn has traded higher for the past several weeks in a row and could see some profit taking ahead of the end of the month and the end of the year, the trader said.

Dry weather with only a few very light showers is expected through Thursday in Argentina, DTN Meteorlogix Weather said. Temperatures are forecast above-to-much above normal Wednesday and Thursday with highs between 90 and 100 degrees Fahrenheit expected in western growing areas, Meteorlogix said.

On daily open auction technical charts, March corn futures hit a fresh contract high and closed near the session high, a technical analyst said. Speculative buying continues to enter into the grain markets but corn bulls could take some profits before year end, a technical analyst said. There are still no signs of a market top being near and a nine-week-old uptrend is in place on the daily bar chart. The next upside price objective remains closing prices above solid technical resistance at US$4.50 per bushel. The next downside objective is closing prices below solid support at US$4.25.

First resistance for March is seen at US$4.41 1/2 and then at US$4.45. First support is seen at US$4.35 and then at Monday's low of US$4.31 1/2.

In other corn news, South Korea canceled a tender for 165,000 metric tonnes of corn.

Corn futures on China's Dalian Commodities Exchange settled lower with the benchmark May contract down RMB24 to RMB1,731/tonne.