March 15, 2007

 

CBOT Corn Outlook on Thursday: Up 1-3 cents on follow through, position squaring

 

 

Chicago Board of Trade corn futures are expected to begin trading 1-to-3 cents higher Thursday, as follow through strength from Wednesday's late rebound and higher prices in overnight activity will provide support for prices, analysts said.

 

In overnight electronic trading, May corn rose 2 1/2 cents to US$4.07 1/4 per bushel and July gained 2 1/2 cents to US$4.17 3/4. E-CBOT volume in May was 6,805 contracts.

 

Corn should start out higher, a floor analyst said. The outside markets are higher, the equities markets are rebounding and prices were higher in overnight activity on position squaring after the recent price weakness, he added.

 

Additional support might cone from short covering as some market participants might want to cover their positions ahead of a private analytical firm's acreage forecast expected to be released on Friday, a floor trader said.

 

The U.S. Department of Agriculture reported weekly corn export sales were 787,700 metric tonnes for the week ended March 8. Included in the total were sales of 38,200 metric tonnes for the 2007-08 marketing year. Analysts had forecast sales between 800,000 and 1.1 million metric tonnes.

 

On daily open auction technical charts, CBOT May corn hit a fresh nine-week low on daily technical charts but settled near the session high, a technical analyst said. Bulls are fading on concerns of possibly much higher U.S. corn acres being planted this year, the analyst said.

 

First resistance is seen at US$4.05 and then at US$4.10. First support is seen at US$4.00 and then at US$3.96 1/2.

 

In the U.S. Midwest mainly dry conditions are forecast for Friday and Saturday with only a little light rain possible in northern sections on Saturday, DTN Meteorologix Weather said. Temperatures are expected to average below normal Friday and near-to-below normal on Saturday.

 

In other corn news, the world corn market is expected to remain volatile in 2007-08 as an expected increase in production won't be enough to meet increasing demand from the ethanol and animal industries, private analytical firm Strategie Grains said Thursday.

 

Columbia, which imported a record 2.8 million metric tonnes of U.S. corn in 2005-06 is likely to increase imports further as its poultry industry and economy continue to grow, according to a USDA attache report posted on the Foreign Agricultural Services web site Wednesday.

 

Corn futures on China's Dalian Commodities Exchange settled mostly higher with the most active September contract up RMB5 at RMB1,695/tonne.