March 14, 2008

 

CBOT Corn Outlook on Friday: 2-3 cents higher on overnight strength

 

 

Chicago Board of Trade corn futures are expected to start trading 2 to 3 cents higher Friday, following the tone established in overnight activity and in the absence of bearish news, an analyst said.

 

In overnight electronic trading, May corn rose 3 1/2 cents to US$5.73 per bushel and December gained 3 1/4 cents to US$5.86 1/2. Electronic trading volume in May was 4,355 contracts.

 

Corn was supported by the stronger tone in soybeans in overnight activity and should open to the upside, an analyst said. Although the outside markets are mixed, they remain near record high levels providing broad support for commodities in general and there was no news out overnight to change current sentiment, the analyst said.

 

The market is waiting on what farmers will plant this spring and corn should be well supported in front of this morning's planted acreage estimate from Informa Economics, said Don Roose, president of U.S. Commodities. The report is expected out around 11:30 a.m. EDT.

 

Concerns about inflation have boosted grain futures as index funds have been buying corn and the funds continued interest in owning commodities should underpin corn, Roose added.

 

On daily technical charts, July corn closed higher Thursday but nearer the session low. Stronger "outside" markets supported the grains as did a selloff in the U.S. dollar, a technical analyst said. Corn bulls still have the solid near-term technical advantage. The bulls' next upside price objective is to push and close prices above resistance at the contract high of 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 Thursday's high of US$5.91 and then at US$5.95. First support is seen at US$5.79 and then at US$5.75.

 

Deliveries posted against the Chicago Board of Trade March corn future were 270 contracts Friday. Large issuers included the customer account of Man Professional Clearing which issued 145 contracts and the customer account of Dorman Trading, which issued 93 contracts. Stoppers included the customer account of Iowa Grain which stopped 171 contracts and the customer account of Fortis which stopped 99 contracts. The last trade assigned was Mar 12.

 

In other corn news, China's National Grains and Oils Information Center left its estimate of 2007 corn production unchanged at 148 million metric tonnes, unchanged from its report released in February. The center said it will release an output and acreage forecast for 2008 in April.

 

Corn futures on China's Dalian Commodity Exchange settled modestly higher with the September contract up RMB/3 at 1,816 RMB/tonne.