March 16, 2006

 

CBOT Corn Outlook on Thursday: Seen flat; lacks market moving influences

 

 

Chicago Board of Trade corn futures are seen starting Thursday's open auction session steady, in step with overnight action, looking for direction amid a lack of market moving influences.

 

In overnight electronic trading, May corn was unchanged at $2.29 1/4, and July corn was 1/4 cent higher at $2.39 3/4 per bushel.

 

The market is poised to continue its battle between solid demand and bearish supply side fundamentals, with improved weather conditions heading into the planting seen anchoring prices, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

The lack of any strong outside influences from other markets is expect to limit speculative interest with Wednesday's weak technical close producing some bearish momentum, traders said. The market should start steady, but two-sided action is possible with a bias to the downside, added Roose.

 

Export demand remains an underpinning feature in the market, with another week of solid sales, but with traders beginning to eyeing improved Midwest soil moisture abundant cash supplies across the heartland, futures are poised to remain confined within its recent trading range.

 

Technical analysts said a close below technical support at Tuesday's low of $2.25 3/4 would provide better downside technical momentum to suggest that a near-term top is in place. First resistance for May corn is seen at $2.33--Wednesday's high--and then at $2.35 3/4--last week's high. First support is seen at $2.27 1/2--Wednesday's low--and then at $2.25 3/4.

 

The U.S. Department of Agriculture said 2005-06 corn weekly export sales totaled 1,029,600 metric tonnes, 25% under the previous week and 12% below the prior four-week average. Major buyers include Japan, in for 342,300 tonnes, and Mexico, buying 232,600 tonnes. Trader expectations ranged from 800,000 to 1,100,000 tonnes. Cash corn basis bids were mostly unchanged across the Midwest.

 

DTN Meteorlogix Weather Service said recent rain and storms have greatly improved soil moisture for the upcoming planting season in the Midwest. Rain and snow is in the forecast for the 5 day period, with the heaviest in the southern half of the Midwest.

 

A little light precipitation is developing through the northwest Midwest early this morning. Temperatures are averaging below normal through the northern portion of the eastern Midwest, near normal south, Meteorlogix adds.

 

The Korea Corn Processing Industry Association, or Kocopia, has bought a total of 105,000 metric tonnes of China and U.S.-origin corn for June-July delivery from trading house ADM in a tender concluded on Thursday, a trader in Seoul said.

 

In overseas markets, corn futures on China's Dalian Commodity Exchange settled slightly lower, as long liquidation continued to dominate the market because of bird-flu concerns. The benchmark September 2006 contract settled RMB11 lower at RMB1,406/tonne.