April 25, 2007

 

CBOT Corn Outlook on Wednesday: 3-4 cents higher on widespread US midwest rains

 

 

Chicago Board of Trade corn futures are predicted to begin day session trading 3-to-4 cents higher Wednesday, underpinned by rain across much of the U.S. Midwest delaying corn planting which is already behind last year's pace as well as the average, a floor trader said.

 

In overnight electronic trading, May corn rose 4 cents to US$3.64 1/2 per bushel, July gained 3 3/4 cents to US$3.75 and December gained 4 cents to US$3.76 1/2. E-CBOT volume in July was 7,734 contracts.

 

The rain across the U.S. corn belt will keep farmers out of their fields and it will take 3-to-4 days before the land dries out and planting can resume, said Brian Hoops of Midwest Market Solutions in a note to clients Wednesday morning.

 

The rain should keep the corn supported, a floor trader said. Planting was already behind last year and this will probably keep the pace well below the average level when the next conditions report is released next Monday, the trader added.

 

In the western U.S. Midwest, rain will continue into Thursday before turning dry later Thursday with mostly dry weather Friday, DTN Meteorologix Weather said. Precipitation should average between .25-1.00 inch. Temperatures are expected to average near-to-mostly below normal south and near-to above normal north.

 

In the eastern sections of the region, rain and showers are expected to continue on Thursday before drier weather returns on Friday, Meteorologix Weather said. Rainfall totals from the Wednesday-Thursday period are expected to average .75-2.50 inches. Temperatures are expected to average mostly below normal Thursday and below normal Friday.

 

In the 6-to-10 day outlook, temperatures are expected to average near-to-above normal, with precipitation near-to-above normal west and near-to-below east.

 

On daily technical charts, July corn filled to the upside a downside price gap created in Monday's trade on ideas of further planting delays, a market technician said. The bears' next downside price objective is closing prices below this week's low of US$3.61, with the bulls gaining fresh upside momentum with a close above last week's high of US$3.83 3/4.

 

First resistance for July is seen at US$3.72 1/2 and then at US$3.75. First support is pegged at US$3.70 and then at US$3.65.

 

In other corn news, corn prices in Asia are expected to increase following the recent gains in CBOT futures, traders in Asia said Wednesday.

 

Cash corn prices in China were modestly higher in the week ended Wednesday as farmers are reluctant to sell on hopes of further gains in prices, analysts said.

 

Corn futures on China's Dalian Futures Exchange settled slightly higher with the September contract up RMB/3 at RMB1,646/tonne.