April 10, 2008

 

CBOT Corn Outlook on Thursday: 5-7 cents higher on follow-through, forecasts

 

 

U.S. corn futures are expected to follow-through on recent record-setting gains by opening another 5-7 cents higher, traders and analysts said Thursday.

 

A combination of bullish April supply/demand data the USDA issued Wednesday, along with increased speculative interest in commodities, U.S. dollar weakness and weather concerns are all supportive features for corn.

 

In addition, spillover from higher wheat and soybean futures are expected to be a bullish influence on corn. Soybeans are called 20-30 cents a bushel higher and wheat is seen up 10-15 cents.

 

"Activity was heavy yesterday, with rising open interest suggesting new buying entering the market, a bullish sign," said Bryce Knorr, senior editor at Farm Futures.

 

Corn futures leapt to another round of all-time highs Wednesday on USDA supply/demand data that showed increased feed usage, a higher export projection and tightening carryover stocks, which were pegged at 1.238 billion bushels, below most trade estimates and also below the 1.303 billion reported in March.

 

The USDA raised feed and residual use by 200 million bushels, lowered corn use for ethanol by 100 million bushels, and raised exports by 50 million bushels.

 

Meanwhile, export sales for the week to April 3 were significantly below pre-report estimates, which may limit efforts of corn prices to keep rallying and may be a sign that the high prices are beginning to affect demand, a broker said.

 

Sales totaled just 483,500 metric tonnes, amid expectations for 700,000 to 1.05 million tonnes. For 2007-08, a marketing year low of 473,900 tonnes was sold, which was also down 32% from the previous week, the U.S. Agriculture Department said. The 2008-09 year saw sales of 9,600 tonnes.

 

Corn shipments, however, improved to 1,254,700 tonnes, up 10% from the previous week and 1% above the previous four-week average, the USDA said.

 

Weather forecasts remain key for the corn market, however, as heavy rains and thunderstorms circulate over much of the Midwest, keeping producers out of the fields for the time being.

 

Northwest Iowa, eastern South Dakota and western Minnesota are expected to see snowfall of 10 inches Thursday, while rains of up to 3 inches will spread over the eastern Midwest, DTN Meteorlogix said.

 

Cold and wet conditions are expected to keep soils too wet to plant corn for at least another week in the Midwest. The long-range outlook is not as dry as was depicted Wednesday, particularly over western and northern areas of the Midwest, Meteorlogix said.