March 29, 2007

 

CBOT Corn Outlook on Thursday: Up 1/2-1 cents higher; waiting on USDA

 

 

Chicago Board of Trade corn futures are expected to begin Thursday's day time trading 1/2-to-1 cent higher with light position squaring expected ahead of Friday's U.S. Department of Agricultural reports supplying support, a commission house analyst said.

 

In overnight electronic trading, May corn gained 1 cent to US$3.89 1/2 per bushel, July rose 3/4 cent to US$4.01 and December ended 1/4 cent higher at US$4.01. E-CBOT volume in May was 1,752 contracts.

 

Corn should see some light position squaring after the recent price declines, however, everyone is waiting on Friday's USDA acreage and quarterly stocks reports so trading could be light and choppy, a floor trader said.

 

U.S. corn planted acreage for the 2007-08 marketing year is estimated at 88.061 million acres, according to a survey of 22 analysts conducted by Dow Jones Newswires. This is 9.7 million acres higher than the 78.3 million planted last year and above the 87.0 million acres estimated by the USDA at its Outlook Forum earlier in March.

 

U.S. quarterly corn stocks were estimated at 6.023 billion bushels as of March 1, 2007, according to a survey of 15 analysts conducted by Dow Jones. Stocks as of March 1, 2006, were estimated at 6.987 billion bushels by the USDA.

 

Weekly corn export sales were stronger than expected and could provide some thin support, the trader said.

 

The USDA reported weekly corn export sales were 1.156 million metric tonnes for the week ended March 22, above the 650,000-1.0 million tonnes expected by analysts. Included in the total were sales of 32,500 tonnes for delivery in 2007-08. Mexico and South Korea were among the largest buyers on the week.

 

In the western U.S. Midwest periods of rain, showers and possible thundershowers are possible during Friday, Saturday and Sunday, DTN Meteorologix Weather said. Potential amounts are .50-2.00 inches and locally heavier. Temperatures are expected to average above normal through Sunday, DTN Meteorologix Weather said.

 

In the eastern sections of the region there is a chance for a few light showers Friday and a chance for scattered showers, thundershowers and some rain during the weekend, with potential amounts .30-1.50 inches. Temperatures are expected to average above normal.

 

On daily open technical charts, CBOT May corn closed at a 2 1/2 month low and bears are gaining some near-term technical momentum heading into Friday's USDA planting intentions report, a technical analyst said. Bulls would regain some upside technical momentum by pushing prices above solid chart resistance at US$4.02 3/4, which would fill a downside gap on the daily bar chart, the analyst said.

 

First resistance is seen at US$3.95 3/4 and then at US$4.00, while first support is seen at US$3.85 and then at US$3.80.

 

In other corn news, the Seoul branch of the Korea Feed Association bought 110,000 metric tonnes of U.S. corn in a tender concluded late Wednesday, an association official said Thursday.

 

Corn futures on China's Dalian Commodities Exchange ended slightly lower with the bench mark September contract down RMB/3 at RMB1,683/tonne.