January 25, 2006

 

CBOT Corn Outlook on Wednesday: Steady, up 1 cent on follow through

 

 

Corn futures at the Chicago Board of Trade are expected to open steady to 1 cent higher Wednesday on followthrough from Tuesday's strong gains, sources said.

 

In overnight e-CBOT trading, March corn gained 1 1/4 cents to $2.14 1/2 per bushel, May corn rose 1 cent to $2.24 1/4, and July corn increased 3/4 cent to $2.32 3/4.

 

The market looks like it has bottomed out and wants to work its way higher, so we could see a little better start, a floor trader said.

 

March corn has climbed above most of its major moving averages and looks like the rally might continue, a commission house analyst said. The funds were big buyers Tuesday and a lot will depend on what they do. In addition, the weather forecast for Argentina is supportive as well, he added.

 

March corn is now trading above its 10-, 20-, 40-, 50- and 100-day moving averages.

 

Mainly dry weather is forecast over the next several days and into the weekend in Argentina with above normal temperatures predicted for later in the period, DTN Meteorlogix weather said.

 

Cash corn basis bids were mostly unchanged Wednesday morning. Central Illinois was unchanged at 3 cents over the March future; St. Louis was also unchanged at 8 cents over the March future.

 

On technical charts, first resistance for March corn is seen at $2.13 1/2, Tuesday's high, and then at $2.15. First support is seen at $2.12, and then at $2.10.

 

In other corn news, China exported 588,711 metric tonnes of corn in December and 8.6 million metric tonnes in the period from January-December 2005, up 271.4% from the previous year, according to data released Wednesday by the General Administration of Customs.

 

Cash corn prices in China were mostly unchanged in the week ended Wednesday, as many traders were closing down their operations ahead of the Lunar New Year Holiday, sources said.

 

Corn futures traded on China's Dalian Futures Exchange finished higher Wednesday on speculative buying, sources said. The most-active September contract jumped RMB32, ending at RMB1,414/tonne.