February 22, 2008

 

CBOT Corn Outlook on Friday: 1-2 cents higher on follow-through, firm exports

 

 

Chicago Board of Trade corn futures are predicted to start trading 1-to-2 cents higher Friday, on follow through buying from Thursday's strong close and a firm weekly export sales report, an analyst said.

 

In overnight electronic trading, May corn slipped 1/2 cent to US$5.37 per bushel and December fell 1 cent to US$5.52. Electronic trading volume in May was 6,713 contracts.

 

The market should open slightly higher, drawing support from Thursday's good close, a commission house analyst said. The U.S. Department of Agriculture's 2008-09 balance sheet contained no major surprises and may not have much influence on price direction, he said.

 

At its Outlook Forum, the USDA estimated 2008-09 corn production at 12.81 billion bushels, down from the 13.074 billion produced in the 2007-08 marketing year. 2008-09 corn ending stocks were pegged at 1.243 billion bushels, below the 1.438 billion bushels projected in 2007-08.

 

Stronger than expected weekly export sales might provide a boost for corn as it appears that high prices are not yet cutting into demand, a trader said.

 

The USDA reported weekly corn export sales were 1.176 million metric tonnes for the week ended Feb. 14, above the 450,000-to-1.0 million tonnes expected by analysts.

 

Market direction will also depend upon the path of the outside inflationary markets, an analyst said. Nearby crude oil is trading modestly lower and gold is holding small losses.

 

In Argentina, there is a chance of a few showers on Saturday and Sunday with chances for scattered-to-widely scattered thundershowers west on Monday and in eastern areas Tuesday or Wednesday, DTN Meteorlogix Weather said. Temperatures are expected to average near normal in the period.

 

On daily technical charts, July corn closed higher and at another fresh contract high close on the weak U.S. dollar and stronger precious metals prices, a technical analyst said. Corn bulls still have solid upside near-term technical momentum, the analyst said. The next upside price objective for market bulls remains closing prices above solid resistance at US$5.51 1/4 per bushel, the contract high. The next downside price objective remains pushing prices below solid support at US$5.21 1/2, which would fill on the downside a big upside price gap on the daily bar chart, the analyst said.

 

First resistance for July corn is seen at Thursday's high of US$5.50 and then at US$5.51 1/4. First support is seen at US$5.42, Thursday's low and then at US$5.37 1/2.

 

In other corn news, corn futures on China's Dalian Commodity Exchange settled lower with the September contract down RMB/14 at 1,792 RMB/tonne.