April 20, 2006

 

CBOT Corn Outlook on Thursday: Steady to up 1/2 cent, looking for direction

 

 

Corn futures at the Chicago Board of Trade are expected to start open outcry trading steady to 1/2 cent higher Thursday as the absence of fresh inputs has the market searching for direction, sources said.

 

In overnight e-CBOT trading, May corn gained 1/4 cent to US$2.38 3/4, July rose 1/4 cent to US$2.50 1/4, and December ended unchanged at US$2.72.

 

There isn't a whole lot of news out Thursday morning, said Shawn McCambridge, senior grain analyst at Prudential Financial. Export sales were good, but a decent pace is needed to reach the USDA's goal of 1.95 billion bushels.

 

The market is searching for direction and it looks to be choppy and range bound, he added. Corn will be watching the outside markets for direction, though they are mixed Thursday morning.

 

The weather forecast for next week looks favorable for planting, he noted.

 

The U.S. Department of Agriculture reported Thursday morning that weekly corn export sales totaled 1,103.1 million metric tonnes for the week ended April 13, above analyst's estimates of 600,000-900,000 tonnes and higher than the 922,400 tonnes sold in the week ended April 6.

 

In the western U.S. Midwest, mainly dry conditions are forecast for Friday and Saturday with a chance for a few light sprinkles or light showers west and north Sunday and locally moderate showers through southeast areas Sunday and early Monday, DTN Meteorlogix Weather said. In the latest 6-10 day outlook precipitation is forecast near to below normal with temperatures expected to average near to above normal.

 

In the eastern U.S. Midwest, scattered rains with amounts to 0.25-1.00 inch are forecast Friday in the southeast and far eastern areas before drier weather returns Saturday, DTN Meteorlogix Weather said. The Delta is expected to have showers and thunderstorms Friday before turning drier on Saturday. Rainfall should average 0.50-2.00 inches. Mainly dry weather is expected on Sunday. In the 6-10 day period, precipitation is forecast near to above normal from the southern portion of the eastern Midwest southward through the Delta, near to below normal further north. Temperatures are expected to average near to below normal.

 

On technical charts, first resistance in July corn is seen at Wednesday's high of US$2.53 1/4 and then at US$2.55, a technical analyst said. First support is pegged at US$2.49 and then at US$2.46 1/2, last week's low.

 

In other corn news, the Korean Corn Processing Industry Association, Kocopia, purchased 110,000 metric tonnes of optional-origin corn from trading firm Glencore in a tender concluded Thursday, an association official said. The corn supplied will be from China, the U.S. or South America.

 

South Korea's Nonghyup Feed Inc., NOFI, purchased 110,000 metric tonnes of U.S. corn from ADM in a tender concluded Thursday, a company official said.

 

The Japanese Food Safety Commission said Thursday it has failed to reach a conclusion about the safety of genetically modified corn known at Bt10. The commission said it hasn't decided whether to approve the Japanese government's plan to allow corn shipments from the U.S. to contain up to 1% of the genetically modified crop, according to a commission official.

 

South Africa's National Crop Estimates Committee reduced its estimate of the country's 2005-06 corn production to 5.92 million metric tonnes from the 6.06 million tonnes it estimated in March. Too much rain in summer grain regions has reduced yields, a committee spokesman said.

 

Corn futures on China's Dalian futures exchange settled lower with the January contract falling RMB7 higher at RMB1,402/tonne.