December 19, 2007

CBOT Corn Outlook on Wednesday: Up 2-3 cents on overnight rebound

Chicago Board of Trade corn futures are expected to begin day time trading 2-to-3 cents higher Wednesday as stronger prices in overnight activity are expected to positively influence price direction at the opening, a commission house analyst said.

In overnight electronic trading, March corn gained 2 3/4 cents to US$4.34 3/4 per bushel. E-CBOT volume in March was 6,319 contracts.

The market should begin trading to the upside, but it may be a two-sided trade, the commission house analyst said. Despite Tuesday's declines, speculative interest bought corn overnight and are expected to support prices at the opening, the analyst said.

There is no fresh fundamental news out, so price direction will be set by technical factors, a trader said. Long-term charts remain favorable which is supportive. However, corn could see some pressure as some participants could continue to reduce their positions before the holidays and the end of the year, the trader said.

Mainly dry weather is expected in Argentina over the next several days with only a chance for a few isolated showers on Friday, DTN Meteorlogix Weather said. There is a chance for thundershowers Sunday and Monday. Temperatures are expected to average above or much above normal through Thursday in the west and southern sections of the country, Meteorlogix Weather said.

On daily open auction technical charts, March corn closed near the session low on profit-taking, though no chart damage occurred, a market technician said. Corn bulls still having a solid near-term technical advantage, with a 10-week-old uptrend remaining in place on the daily bar chart, the technician said. The next upside price objective is to close prices above the open auction contract high of US$4.41 1/2 per bushel. The next downside target for the bears remains pushing prices below solid support at US$4.25. First resistance is seen at US$4.36, Tuesday's high and then at US$4.40. First support is pegged at US$4.30 and then at US$4.25.

In other corn news, cash corn prices in China were steady in the week ended Wednesday as traders expect stable prices in the short term. Analysts said market participants have noted recent cues that the government will take serious measures to control price increases in the short term.

Corn futures on China's Dalian Commodities Exchange settled mildly lower with the benchmark May contract down RMB6 to RMB1,725/tonne.