January 26, 2006

 

CBOT Corn Outlook on Thursday: Steady To +1 cent after strong exports data

 

 

Corn futures at the Chicago Board of Trade are forecast to begin open auction trading steady to 1 cent higher, following Thursday morning's larger than expected weekly export sales figure and two days of strong gains, analysts said.

 

In overnight e-CBOT trading, March corn fell 1 1/4 cents to $2.15 1/4 per bushel, May corn slipped 1 cent to $2.25, and July corn fell 1 cent to $2.34.

 

The U.S. Department of Agriculture on Thursday morning reported weekly corn export sales of 2.157 million metric tonnes, well above the 800,000 to 1.4 million expected by analysts and a marketing year high.

 

Major buyers included Japan at 723,300 metric tonnes and South Korea at 285,000 metric tonnes.

 

After the huge buying during the past three days, the market is due for a technical stall out, said Don Roose, president of US Commodities in West Des Moines, Iowa. The buying might have included commercial pricing as well, so the question is how much of these sales were in the market, he added.

 

Open interest continues to climb in corn futures after the recent heavy buying. According to preliminary open interest figures released Thursday morning by the CBOT, corn open interest set another record at more than 914,000 contracts.

 

March corn has rallied sharply since trading as low as $2.03 1/2 in Monday's session, gapping open higher in Wednesday's session and trading as high as $2.18 1/4 on an intraday basis, and moving through most of its major moving averages.

 

Mostly dry weather is forecast in the corn producing regions of Argentina during the next several days with above normal temperatures predicted during the weekend before cooler weather returns Tuesday, DTN Meteorlogix weather said.

 

Cash corn basis bids were mostly unchanged to lower Thursday morning. Central Illinois was unchanged at 3 cents over the March; St. Louis also was unchanged at 8 cents over the March future.

 

On technical charts, bulls have regained some technical momentum this week, and a close above the January high of $2.21 would provide the bulls with good upside technical momentum, a technical analyst said. He pegs resistance for March corn at $2.18 1/4, Wednesday's high, and then at $2.21. First support is seen at Wednesday's low of $2.15, and then at $2.13 1/2, the bottom of Wednesday's upside price gap on the daily bar chart.

 

Corn futures traded on China's Dalian Futures Exchange finished mostly higher Thursday on short covering, sources said. Most-active September contract jumped RMB13, ending at RMB1,427/tonne.