December 20, 2005

CBOT Corn Outlook on Tuesday: Seen flat to +1 cent, following e-CBOT trade

Corn futures at the Chicago Board of Trade are expected to open flat to 1 cent higher Tuesday, following the tone established overnight and Monday's firm close, sources said.

In overnight e-CBOT trading, March corn gained 1/2 cent to US$2.09 1/4 per bushel, May rose 1 cent to US$2.18 3/4 and July corn edged up 1/4 cent at US$2.27.

There is little fresh news out Tuesday morning and Monday's close might have been overdone, a floor analyst said. It looks like trading will remain technically oriented, and market direction will depend on the funds, he added. The fundamental picture remains bearish, and there were rains overnight in South America, he noted.

Corn will look to other markets for direction again, a floor trader said. On Monday, a late rally in soybeans and soy meal helped lift corn higher and corn could follow this recent path he said. Soybeans are called to open flat-mixed Tuesday morning.

Argentina is forecast to remain mostly dry over the next 48-hours with showers and thunderstorms possible on Friday in the northern sections of the country, DTN Meteorlogix weather said.

On technical charts, market technicians note that resistance remains at the US$2.10 level in March corn and it will take a close above this level to provide the bulls with better confidence that a fresh upward trend can occur. First resistance for March corn is seen at US$2.10, and then at US$2.12, with first support set at US$2.06 1/2, Monday's low and then at US$2.02.

Cash basis bids were mixed Tuesday morning. Central Illinois was 1 cent higher at 3 cents over the March future, while St. Louis was 5 cents lower at even March futures.

In other corn news, corn futures settled mixed at China's Dalian Commodity Exchange, sources said. The most-active September contract gained RMB5 higher to RMB1,347/tonne.