March 22, 2007

 

CBOT Corn Outlook on Thursday: 1-2 cents lower following e-CBOT weakness

 

 

Chicago Board of Trade corn futures are forecast to start day session trading 1-to-2 cents lower Thursday as follow through from a weaker price values in overnight activity is seen as negatively influencing prices at the opening, a commission house analyst said.

 

In overnight electronic trading, May corn declined 2 1/4 cents to US$4.07 1/2 per bushel, July fell 2 cents to US$4.19 1/4 and December slipped 1 cent to US$4.08 1/2. e-CBOT volume in May was 2,560 contracts.

 

Corn could see a weaker start after lower prices in the overnight session, a floor trader said. However, gold and silver are higher and crude oil is stronger as well and that could positively influence price direction, he said.

 

Trading could be choppy, an analyst said. Prices were weaker overnight but corn could be supported if there is additional bull spreading seen in Wednesday's trade. In addition, even though it is early in the year, the wet weather in the U.S. Midwest is a concern to some participants and may also be supportive, the analyst added.

 

The U.S. Department of Agriculture reported weekly corn export sales were 678,900 metric tonnes for the week ended March 15, below the 700,000-1.0 million tonnes expected by analysts. Included in the total were sales of 37,900 tonnes for delivery in the 2007-08 marketing year.

 

A floor analyst said export sales were weak.

 

In the western U.S. Midwest there is a chance for showers and thundershowers with amounts of .30-1.50 inches in southern areas on Friday and Saturday, DTN Meteorologix Weather said. In the eastern section of the region, periods of showers and thunderstorms with amounts of .50-1.50 inches are forecast through Saturday. Temperatures are forecast to average above to well above normal in the period across the region.

 

On daily open auction technical charts, CBOT May corn settled higher on short covering, and the bulls are regaining upside technical momentum on market friendly weather forecasts, a technical analyst said. May is near the upper end of a four-week-old down trending channel on the daily bar chart and a higher close on Thursday would be bullish, the analyst added.

 

First resistance for May corn is seen at US$4.11 1/2, Wednesday's high and then at US$4.15. First support is seen at US$4.04 and then at US$4.00.

 

In other corn news, China exported 770,248 metric tonnes of corn in February and 1.774 million tonnes in the Jan.-Feb. period up 24.9% from last year, according to China's General Administration of Customs.

 

Corn futures on China's Dalian Commodities Exchange settled modestly lower with the bench mark September contract down RMB5 at RMB1,690/tonne.