March 30, 2007

 

CBOT Corn Outlook on Friday: 5-10 cents lower on bearish acreage estimate

 

 

Chicago Board of Trade corn futures are forecast to begin day session trading 5-to-10 cents lower Friday after the U.S. Department of Agriculture released a bearish planted acreage estimate, floor traders said.

 

In overnight electronic trading, May corn rose 2 cents to US$3.96 1/2 per bushel, July gained 2 1/2 cents to US$4.08 and December fell 2 1/4 cents to US$4.01 1/4. E-CBOT volume in May was 3,760 contracts.

 

The USDA estimated 2007-08 planted corn acreage at 90.454 million acres, up from the 78.327 million acres planted in 2006, and above the average analyst estimate of 88.061 million acres. "They (planted acreage estimates) were at the top end of the range on corn, bottom end of the range on beans. They're not numbers we haven't seen before. We leaned into this report with a negative bias on corn and a positive bias on beans, and that's exactly the way it came in," said Don Roose, president of US Commodities in West Des Moines, Iowa

 

The USDA estimated U.S. quarterly corn stocks at 6.070 billion bushels as of March 1, 2007, below the 6.987 billion bushels on March 1, 2006 but above the 6.023 billion bushel average analyst estimate.

 

The stocks figure was a little negative, above expectations but the acreage estimate was more negative and will have more impact on prices, a commission house analyst said.

 

The USDA estimated corn acreage to increase in several key Midwestern states with planted corn acreage in Illinois estimated up 1.6 million acres to 12.9 million acres. In Iowa, farmers are expected to seed 13.9 million acres to corn, up 1.3 million acres from 2006.

 

In the western U.S. Midwest episodes of showers and possible thundershowers are possible Saturday with drier weather on Sunday, DTN Meteorologix Weather said. Light to moderate rain re-develops during Monday. Temperatures are expected to average near-to-below normal northwest and mostly above normal elsewhere in the region, Meteorologix Weather said.

 

In the eastern sections of the region there is a chance for showers and thundershowers Saturday with drier weather on Sunday. On Monday there is a chance for light rain or drizzle in northern areas on Monday. Temperatures through Sunday will average above normal, Meteorologix Weather said.

 

On daily technical charts, CBOT May corn closed nearer the session high Thursday but bears still have near-term technical momentum heading into the planting intentions report Friday, a technical analyst said. Bulls would regain some upside technical momentum by pushing May above solid chart resistance at US$4.02 3/4, while the bears' next downside objective is closing prices below this week's low of US$3.85, the analyst said.

 

First resistance is seen at US$3.97 1/2 and then at US$4.00, while first support is seen at US$3.90 and then at US$3.85.

 

In other corn news, corn futures on China's Dalian Commodities Exchange ended modestly higher with the bench mark September contract up RMB/4 at RMB1,687/tonne.