January 20, 2006

 

CBOT Corn Outlook on Friday: Seen flat to 1 cent higher

 

 

Corn futures at the Chicago Board of Trade are expected to start trading steady to one cent higher on ideas the market is technically oversold and due for a bounce, sources said.

 

In overnight e-CBOT trading, March corn rose 1/2 cent to US$2.05 1/2 per bushel, May corn gained 1/2 cent to US$2.15 1/4, and July corn ended up 1/4 cent to US$2.24.

 

The market could receive some support from oversold conditions, a floor analyst said. In addition, weekly export sales were above expectations, and there could be some position squaring ahead of the weekend as well, he added.

 

Technical charts look weak for corn, but it's near where the market bottomed previously so it might be able to generate some support at these levels, a floor trader cautioned.

 

The U.S. Department of Agriculture reported weekly corn export sales were 1.22 million metric tonnes for the week ended Jan. 12. Analysts had expected sales between 750,000 and 1.1 million metric tonnes.

 

Mostly dry conditions are expected in much of Argentina over the next several days with scattered showers and thundershowers developing early next week, DTN Meteorlogix weather said. Temperatures are expected to average near normal in the period, Meteorlogix said.

 

Cash corn basis bids were mostly unchanged to higher Friday morning. Central Illinois was unchanged at 3 cents over the March; with St. Louis was 1 cent higher, at 6 cents over the March future.

 

On technical charts, first resistance for March corn is seen at US$2.07, Thursday's high and than at US$2.08 1/4, the top of Wednesday's downside price gap on daily bar charts. First support is seen at Thursday's low of US$2.04 3/4 and then at US$2.04.

 

In other corn news, Argentina's cash corn prices ended the week through Thursday at slightly higher levels in thin trading, sources said.

 

The Argentine Corn Association or Maizar expects 2005-06 corn production will total 14 million metric tonnes. The USDA is estimating 2005-06 corn production at 16.8 million metric tonnes.

 

Through Friday, Argentina has sold 13.705 million metric tonnes of 2004-05 corn for export, up from 10.495 million the previous year, according to data from the Agriculture Secretariat.

 

Corn futures traded on China's Dalian Futures Exchange settled mostly higher Friday on bargain hunting, sources said. The September contract rose RMB6, ending at RMB1,379/tonne.