April 24, 2008

 

CBOT Corn Outlook on Thursday: Up 2-3 cents on overnight rise, weather

 

 

U.S. corn futures are expected to open 2-3 cents a bushel higher Thursday after prices bounced slightly in overnight trade following a lower pit close on Wednesday and as showers and storms move through the heart of the corn belt, analysts said.

 

Overnight action saw Chicago Board of Trade May corn rise 1 1/4 cents to US$5.89, July was up 1 cent to US$6.02 1/2 and December added 1 1/2 cents to US$6.14 a bushel.

 

The market is expected to garner light support from uncertainty in the weather forecasts, although a firmer U.S. dollar and a weak crude oil market may eventually exert outside pressure on corn, traders and analysts said.

 

But traders will likely not want to take corn down too far as rains continue to move through the central Midwest and further delay planting. Thursday morning, a system is bringing showers and storms in a line from southern Minnesota and southeastern Wisconsin down to Iowa and Missouri and points south.

 

Traders are "still just as nervous about extended weather forecasts showing a continuation of the current wet pattern in the Midwest," said Farm Futures analyst Arlan Suderman.

 

Shorter term weather models have introduced more rainfall for central Illinois and central Indiana than they showed on Wednesday, with the centers of this band between Springfield, Ill., and Lafayette, Ind., Mike Zuzolo, analyst at Risk Management Commodities, said in emailed comments.

 

"Yesterday, the models showed no real 'bulls-eyes,' but today's maps have this area mentioned in the 1.5-1.75 inch amount totals through the weekend," he said.

 

Meanwhile, weekly export sales data was in line with trade estimates and was not expected to have a large effect on prices.

 

Corn sales for the week to April 17 totaled 775,300 metric tonnes for 2007-08, down 11% from the previous week but up 16% from the previous four-week average, the U.S. Agriculture Department reported. The bulk of the sales went to Japan at 485,700 tonnes, with Mexico the next largest at 177,100 tonnes.

 

For the 2008-09 marketing year, 212,300 tonnes were sold.

 

Weekly corn shipments were reported at 1,109,900 tonnes, unchanged from the previous week but down 7% from the prior four-week average, the USDA said. Top destinations were Japan at 299,700 tonnes, South Korea with 295,100 and Mexico at 184,300 tonnes.

 

In other news, the International Grains Council pegged global corn production at 762 million tonnes, down 13 million tonnes from last year, as rains delay U.S. plantings.

 

Malaysia is seeking 200,000 tonnes of corn for July shipment, mostly from India.

 

Chinese corn futures rose on the Dalian Commodity Exchange Thursday, supported the slow pace of planting progress in the U.S. and the possibility that producers here may not be able to plant as much corn as they would prefer due to the adverse weather, a trader said.