January 10, 2008

 

CBOT Corn Outlook on Thursday: Down 1-2 cents; consolidating ahead of reports

 

 

Chicago Board of Trade corn futures are expected to begin day time trading 1-to-2 cents lower Thursday as participants consolidate positions ahead of Friday's U.S. Department of Agriculture reports with spillover from weaker energy and metals markets also expected to dampen buying interest at the opening, analysts said.

 

In overnight electronic trading, March corn fell 3/4 cent to US$4.76 1/2 per bushel. Overnight e-cbot volume in March was 4,898 contracts.

 

The average production estimate for the 2007-08 U.S. corn crop was 13.109 billion bushels, according to a survey of 19 analysts by Dow Jones Newswires, 59 million bushels below the 13.168 billion estimated by the U.S. Department of Agriculture in November. The average yield estimate for the 2007-08 crop was 152.3 bushels per acre, according to 15 analysts surveyed, compared to the 153.0 bushels estimated in November.

 

The average 2007-08 corn ending stocks estimate is 1.698 billion bushels, according to a survey of 17 analysts, down from the 1.797 billion bushels estimated in December. The average quarterly corn stocks estimate as of Dec. 1 is 10.550 billion bushels, in a survey of 13 estimates. Stocks as of Dec. 1 2006 totaled 8.933 billion bushels.

 

The USDA is scheduled to release an updated report Friday at 0830 EST (1330 GMT).

 

Corn prices have been supported in part by the recent gains in energy and metals markets, but both are trading lower, which could also limit buying interest, a trader said. Weekly corn export sales were "light" and there is precipitation in Argentina, the trader added.

 

The USDA reported weekly corn export sales were 720,100 metric tonnes for the week ended Jan. 3, within the 500,000-to-1.050 million tonnes expected by analysts. Included in the total were sales of 50,000 tonnes for delivery in 2008-09.

 

Scattered showers and thunderstorms with amounts of 0.25-to-1.00 inch with locally heavier amounts are possible Thursday, said DTN Meteorlogix Weather. Dry weather is forecast Friday through Monday, with scattered showers and thunderstorms possible on Wednesday. Temperatures are forecast near-to-below normal Friday, near-to-above normal Saturday, and above-to-much-above normal Sunday-to-Tuesday, Meteorlogix Weather said.

 

On daily technical charts, March corn prices reached another contract and 12-year high Wednesday before closing lower. The market is waiting on Friday's USDA annual production and supply/demand report. Corn bulls are still in technical command with no strong clues near-term clues that a market top is close at hand, with a three-month-old uptrend in place, a technical analyst said. The next upside price objective remains pushing and closing prices above solid resistance at US$5.00 per bushel. The next downside objective is to push prices below solid support at US$4.68 1/4, to fill on the downside Tuesday's upside price gap on the daily bar chart.

 

First resistance for March corn is seen at Wednesday's contract high of US$4.81 1/2 and then at US$4.85. First support is seen at US$4.75, and then at US$4.71.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled slightly higher with the benchmark Sept. contract up RMB/1 at 1,837RMB/tonne.