April 6, 2006

 

CBOT Corn Outlook Thursday: Up 1-2 cents on outside markets, e-CBOT

 

 

Corn futures at the Chicago Board of Trade are forecast to begin trading 1-2 cents higher as firm prices overnight and stronger precious metals and energy markets are expected to provide support, sources said.

 

In overnight e-CBOT trading, May corn rose 1 3/4 cents to $2.38, and July gained 1 1/2 cents to $2.49.

 

Corn should draw support from the firm tone in overnight trade, a floor analyst said. Wednesday's close was supportive on a technical basis and the stronger gold and energy markets could add support as well, he noted.

 

The higher outside markets will provide support at the opening, agreed a commission house analyst. But the market will need additional buying interest from the funds to provide additional strength. Export sales were below expectations and the early season weather remains favorable, he added.

 

The U.S. Department of Agriculture reported that corn export sales totaled 659,400 metric tonnes for the week ended March 30, below analysts expectations.

 

Rain and thundershowers are forecast for Thursday and Friday in both the eastern and western US Midwest corn growing regions, DTN Meteorlogix Weather said. Amounts could range from .50-1.50 inch with heavier amounts possible. Drier weather returns to the region over the weekend and into Monday, DTN Meteorlogix weather noted.

 

On technical charts, last week's high of $2.43 in May remains strong overhead resistance for market bulls, a technical analyst said. A move above it would suggest another solid run-up in prices. If the bears can fill on the downside last Friday's upside price gap below $2.28, that would suggest a sideways to lower trend, the analyst added.

 

First resistance for May corn is seen at $2.36 3/4, Wednesday's high and then at $2.38 1/2. First support is pegged at $2.34 1/4, and then at $2.33 1/2, this week's low.

 

In other corn news, corn futures on China's Dalian futures exchange ended mostly higher as market participants continue to roll over to forward contracts. The most liquid September contract settled RMB4 higher at RMB1,401/tonne.