January 19, 2007

 

CBOT Corn Outlook on Friday: Steady to slightly lower start expected

 

 

Chicago Board of Trade corn futures are predicted to begin trading steady-to-2 cents lower Friday reflecting price weakness in the overnight session but tempered by stronger-than-expected weekly corn export sales, sources said.

 

In overnight e-CBOT trading, March corn fell 3 1/4 cents to US$4.09 cents per bushel and May slipped 3 3/4 cents to US$4.18 1/4. e-CBOT volume in March was 7,980 contracts.

 

Corn should begin trading steady to a little easier, a floor analyst said. The market was weaker overnight on profit taking but the weekly exports were well above expectations and should temper the weakness, he added.

 

The U.S. Department of Agriculture reported weekly corn export sales were 1,570.6 million metric tonnes for the week ended Jan. 11, well above the 800,000-1.05 million metric tonnes expected. Included in the total were sales of 147,600 tonnes for delivery in the 2007-08 marketing year.

 

Japan, Mexico and unknown destinations were three largest buyers on the week. The report was delayed a day due to Monday's holiday.

 

The market is still technically driven but the sales should limit the downside as it appears that demand for corn at recent prices remains firm, a commission house analyst noted.

 

In addition, Informa Economics is expected to release acreage estimates sometime during the session and that could also have an impact on market direction, he added.

 

The market is overbought technically and without the strength to make new highs, prices could see a pullback, said Brian Hoops of Midwest Market Solutions in a note to clients Friday. The longer term trend remains bullish so any pulback in prices should attract buying interest, he added.

 

On day session open auction technical charts, while the bulls are still in technical control look for more high volatility in the near term, a market technician said.

 

First resistance in March is seen at the all time high of US$4.20 1/2 and then at US$4.25. First support is pegged at US$4.05 1/4, and then at US$4.00.

 

In other corn news, the USDA announced that 120,000 metric tonnes of U.S. corn had been sold to Egypt for delivery in the 2006-07 marketing year.

 

Acreage planted with genetically modified Bt corn more than doubled in the Philippines to 160,000 hectares last year, up from 70,000 in 2005, according to an industry estimate.

 

Corn planting in India between Oct. 1 and Jan. 19 is estimated at 1.06 million hectares compared to 740,300 last year, according to Indian government data released Friday.

 

Corn futures prices on China's Dalian Commodities Exchange ended mostly lower on reduced demand as exporters have completed full-year purchase from farmers, sources said. The most-active September contract fell RMB/27 at RMB1,731/tonne.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the commitment of traders report for the period ending Jan. 16.