January 24, 2008

 

CBOT Corn Outlook on Thursday: Up 9-11 cents; overdone losses, outside markets

 

 

Corn futures on the Chicago Board of Trade are expected to start Thursday's day session sharply higher, as the market stages a recovery from Wednesday's limit-down plunge, analysts said.

 

Analysts expect corn to open 9 to 11 cents higher.

 

In overnight electronic trading, March corn was 11 1/2 cents higher at US$4.80 3/4, May corn was 11 cents higher at US$4.92 1/4, and December corn was 7 1/2 cents higher at US$4.91 1/2.

 

The ability of equity markets to recover and hold gains from Wednesday is providing a supportive signal to traders, with ideas recent declines were overdone expected to attract speculative buying, analysts added.

 

The market will continue to closely monitor outside market influences to see if large speculative funds return to their aggressive buying stance after bullish momentum was dealt a blow in recent sessions, a CBOT floor analyst said.

 

Otherwise, supportive underlying export demand is seen supporting prices, with traders awaiting Friday's U.S. Department of Agriculture weekly export sales report to see if recent declines sparked increased buying interest, a CBOT floor broker said.

 

A technical analyst said corn bulls are now really spooked, which could spark more long liquidation in this market in the near term. The seasonal "February Break" phenomenon is occurring in the grains.

 

The next upside price objective for March corn is to push and close prices above resistance at US$4.80 a bushel. The next downside price objective is to produce a close below solid support at US$4.60. First resistance for March corn is seen at US$4.75 and then at US$4.80. First support is seen at US$4.65 and then at US$4.60.

 

The DTN Meteorlogix Weather Service said moisture stress continues in developing corn in Argentina's major growing areas. Some shower activity is possible in western growing areas during this weekend but this is not expected to be a significant system. The 5 day period is not very hot. The 6-10 day period may be hotter, but this is a long range outlook and subject to significant day to day changes, Meteorlogix said.

 

The U.S. Department of Agriculture announced Thursday private export sales of 296,000 metric tonnes of corn for delivery to South Korea in the 2007-08 marketing year.

 

In other news, the Turkish state grain board, or TMO, has purchased 100,000 metric tonnes of milling wheat and 95,000 tonnes of corn in a tender that closed Tuesday, the Ihlas News Agency, or IHA, reported Thursday, citing a TMO official. All of the corn was from the U.S. and the wheat from Kazakhstan, the official said.

 

Philippine corn output in the first half of the year is expected to rise 9% to 3.01 million metric tonnes as high domestic prices encourage farmers to plant more, a senior agriculture official said Thursday.