February 13, 2008

 

CBOT Corn Outlook on Wednesday: Seen 3-4 cents lower; following wheat weakness

 

 

Chicago Board of Trade corn futures are predicted to start day session trading 3-to-4 cents lower Wednesday with an expected sharp decline in CBOT wheat expected to pressure corn values, analysts said.

 

In overnight electronic trading, March corn declined 4 cents to US$4.93 3/4 per bushel and December slipped 3 1/4 cents to US$5.17. Electronic trading volume in March was 4,802 contracts.

 

"Wheat is the 800 pound gorilla of the grains and whatever it does the rest of the floor will follow," a commission house analyst said.

 

CBOT March wheat ended the overnight session 19 cents lower at US$9.88 per bushel and is called to open 19-to-25 cents lower.

 

Technically the market looks weak after recent price action and that could limit any interest to the upside, a trader said. In addition, there is nothing new fundamental-wise for corn and the weather in South America remains mostly favorable for crop development, the trader said.

 

In Argentina, warmer weather during the balance of the week will probably benefit crops, DTN Meteorlogix Weather said. Mainly dry weather is expected through Friday with temperatures forecast near-to-above normal Thursday and Friday, Meteorlogix Weather said.

 

On daily technical charts, July corn closed lower and nearer the session low as corn bulls are fading, a technical analyst said. Recent technical action has not been bullish and another sell off in CBOT and KCBT wheat pressured prices, the analyst said. The bulls' next upside price objective is to push and close prices above resistance at US$5.35 per bushel. The next downside objective remains closing prices below solid support at last week's low of US$5.14 1/4.

 

First resistance for July corn is seen at US$5.25 and then at US$5.28 1/4, Tuesday's high. First support is seen at US$5.18 and then at this week's low of US$5.16.

 

In other corn news, cash corn prices in China were little changed Wednesday compared with prices two weeks ago due to the week-long Lunar New Year holidays, with shrinking demand for feedmeal expected to keep prices on the downside, analysts said.

 

China's National Grain and Oils Information Center kept its forecast for 2007 corn production unchanged at 148 million metric tonnes, the state backed think tank said Wednesday.

 

Corn futures on China's Dalian Commodity Exchange ended lower with the September contract down RMB11 at 1,768RMB/tonne.