December 21, 2005

 

CBOT Corn Outlook on Wednesday: Called 1 cent lower on overnight trade

  

 

Corn futures at the Chicago Board of Trade are predicted to open 1 cent lower Wednesday, continuing the tone set in overnight electronic trading, sources said.

 

In overnight e-CBOT trading, March corn fell 1 1/4 cents to US$2.08 1/2 per bushel, May slipped 1/4 cent to US$2.18 1/2 and July corn lost 1 cent at US$2.26 1/4.

 

Soybean futures were weaker late Tuesday and in overnight trade and should provide some negative direction for corn futures Wednesday morning, a floor analyst said. The early call is for soybeans to open 3-5 cents lower. In addition, precious metals markets were lower Wednesday morning and there has been no significant change in South American weather, he added.

 

Other sources noted that with only two full days before the holiday season begins, traders will begin to reduce their activity and even up their positions ahead of the holidays.

 

Dry weather is expected in much of Argentina Wednesday and Thursday with scattered showers and thundershowers forecast on Friday, DTN Meteorlogix weather said.

 

On technical charts, market technicians note despite reaching a 4-month high in Tuesday's open auction session, it will take a close above US$2.10 in March futures to provide bulls with evidence that an uptrend can be established. First resistance for March corn is seen at US$2.12, Tuesday's high and then at US$2.13 1/4, with first support set at US$2.08 1/4, Tuesday's low and then at US$2.06 1/2.

 

In other corn news, cash corn prices in China were mostly higher in the week ended Wednesday as a government set minimum purchase price helped underpin futures, sources said. A recovery in feed demand as bird flu concerns ease, buying by state-owned grain firms and processors and farmer reluctance to sell also supported prices, they added.

 

Ukraine's grain stocks are sufficient to last until the beginning of the next marketing year, which begins July 1, with the agriculture ministry forecasting 8.9 million metric tonnes will remain when the 2006-07 marketing year begins, according to a statement from the agricultural ministry released Wednesday.

 

Russia's 2005 grain production was 78.1 million metric tonnes after cleaning and drying, unchanged on the year, according to preliminary figures by the Federal State Statistics Service released Wednesday.

 

Corn futures settled lower at China's Dalian Commodity Exchange, sources said. The most-active September contract fell RMB5 to RMB1,342/tonne.