March 13, 2008

CBOT Corn Outlook on Thursday: Up 1-3 cents on firm soy, outside market gains

Chicago Board of Trade corn futures are expected to begin trading 1 to 3 cents higher Thursday, underpinned by stronger soybean values overnight as well as higher prices in "outside" inflationary markets, analysts said.

In overnight electronic trading, May corn gained 1 1/2 cents to US$5.68 3/4 per bushel and December rose 1 cent to US$5.80 1/2. Electronic trading volume in May was 3,441 contracts.

Corn was underpinned by higher values in soybeans overnight and that should provide some support for prices at the opening, an analyst said. In overnight trade, May soybeans ended up 19 3/4 cents at US$14.14 3/4 per bushel.

Stronger "outside" inflationary markets might also support corn prices as commodities in general look to trade higher, a commission house analyst said. Nearby gold traded at US$1,000 per ounce earlier and crude oil is higher as well. In addition, the dollar is "getting pounded" versus other major currencies and that should add to buying interest as well, the commission house analyst said.

The U.S. Department of Agriculture reported that weekly corn export sales totaled 1.226 million metric tonnes for the week ended March 6, above the 600,000 to 1.0 million tonnes expected by analysts. Included in the total were sales of 457,200 tonnes for delivery in the 2008-09 marketing year. A trader termed the sales as "very good, while an analyst said that given the recent export news, the sales were disappointing.

On daily technical charts, July corn settled lower Wednesday as mild profit-taking was featured, a technical analyst said. There are still no technical clues that a market top is at hand and market bulls still hold the near-term technical advantage, the analyst added. The next upside price objective is to push and close prices above resistance at US$5.91 per bushel. The next downside price objective for the bears is to push and close prices below solid support at last week's low of US$5.58 1/4.

First resistance for July corn is seen at Wednesday's high of US$5.84 and then at US$5.91. First support is seen at US$5.75 and then at US$5.71.

Deliveries posted against the Chicago Board of Trade March corn future were 313 contracts Thursday. Large issuers included the customer account of RJ O'Brien which issued 198 contracts and the house account of Tenco, which issued 59 contracts. Stoppers included the customer account of Man Professional Clearing which stopped 141 contracts and the customer account of Dorman Trading which stopped 93 contracts. The last trade assigned was Mar 10

In other corn news, corn futures on China's Dalian Commodity Exchange settled lower with the September contract down RMB/8 at 1,813 RMB/tonne.