December 19, 2006

CBOT Corn Outlook on Tuesday: Mixed start after quiet overnight trade

Chicago Board of Trade corn futures are predicted to begin trading mixed Tuesday as little fresh news and a quiet overnight trade are expected to limit volatility at the open, sources said.

In overnight e-CBOT trading, March corn ended up 1/4 cent at US$3.66 per bushel and May slipped 3/4 cent to US$3.73. e-CBOT volume in March was 3,896 contracts.

The market was quiet overnight and there is a lack of fresh news out heading into the holiday and the end of the year, a floor analyst said. After Monday's price weakness corn might attempt a turn around but there is not much to base it on with energy futures weaker, he added.

Despite the fact the funds are at record long corn positions, prices ended lower Monday as new fund buying was unable to rally pries into new highs, said Brian Hoops of Midwest Market Solutions in a note to clients Tuesday. Corn could attempt a turnaround Tuesday but with technical indicators remaining bearish it may be difficult for prices to move higher, Hoops said in the note.

Continued favorable near-term weather is forecast for Brazil and Argentina with scattered showers and thundershowers expected over the next several days, DTN Meteorologix weather said.

On day session open auction technical charts, March corn gapped open lower and touched a fresh four-week low. The bulls are fading but still have the near-term technical advantage, a technical analyst said. Their upside price objective remains closing prices above US$3.80 per bushel while the bears' objective is closing prices below solid support at US$3.60.

First resistance for March corn is seen at US$3.66, Monday's high and then at US$3.68. First support is pegged at US$3.62 and then at US$3.60.

Cash corn basis bids were mixed Tuesday with Central Illinois unchanged at 3 cents under the March future.

In other corn news, corn futures on China's Dalian Commodities Exchange settled mostly lower however the benchmark May contract ended unchanged at RMB 1,601/tonne.