December 20, 2007

CBOT Corn Outlook on Thursday: 1-2 cents higher following e-CBOT gains

Chicago Board of Trade corn futures are predicted to begin trading 1-to-2 cents higher Thursday, following the tone set in overnight activity with trading expected to be slow ahead of the upcoming holiday, an analyst said.

In overnight electronic trading, March corn gained 2 1/2 cents to US$4.37 1/4 per bushel. E-CBOT volume in March was 3,096 contracts.

Corn should open higher, following the overnight gains, the analyst said. The holidays are fast approaching and there was no fresh news out except for the weekly export sales which were within the range of estimates and should be supportive, the analyst said.

The U.S. Department of Agriculture reported that weekly corn export sales for the period ending Dec. 13 totaled 1.169 million metric tonnes, within the 800,000-to-1.3 million tonnes expected by analysts.

The path of least resistance is to the upside right now with not much interest in pushing the market lower, a trader said. However, the end of the year is approaching and there could be some evening up of positions ahead of it, the trader said.

Very hot weather extends into Friday in Argentina which could increase stress on developing crops, including corn, said DTN Meteorlogix Weather. Scattered thunderstorms Sunday into Monday will help to ease stress to corn, but it is uncertain if the rainfall will hit La Pampa's corn area, Meteorlogix Weather said.

On daily open auction technical charts, March corn closed mid-range in quiet trading as the market is pausing at higher levels, but this pause is not bearish, a technical analyst said. Bulls are still powerful technically, but it would not be a surprise to see some profit-taking pressure before year end, the analyst said. The next upside price objective remains closing prices above the open auction contract high of US$4.41 1/2 per bushel. The next downside target for the bears is to push prices below solid support at US$4.25. First resistance is seen at Wednesday's high of US$4.36 1/4, and then at US$4.40. First support is pegged at US$4.31 1/4, this week's low and then at US$4.25.

In other corn news, corn futures on China's Dalian Commodities Exchange settled near unchanged with the benchmark May contract up RMB1 to RMB1,726/tonne.