April 26, 2007

 

CBOT Corn Outlook on Thursday: Up 5-7 cents on planting concerns, follow-through

 

 

Chicago Board of Trade corn futures are predicted to begin day session trading 5-to-7 cents higher Thursday, supported by continued concerns over planting delays due to the recent rainy weather as well as follow through buying from Wednesday's gains, a floor analyst said.

 

In overnight electronic trading, May corn gained 6 1/2 cents to US$3.77 3/4 per bushel, July rose 6 cents to US$3.87 3/4 and December gained 6 3/4 cents to US$3.86 1/4. E-CBOT volume in July was 10,398 contracts.

 

Worries about planting delays due to this week's heavy rains should continue to support prices, a floor analyst said. Although it looks warmer and drier for next week which should allow farmers back into their fields, plantings are well behind last year and there is another weather system for late next week in the U.S. Midwest which could keep corn planting behind the normal pace, the floor analyst added.

 

Spillover buying from the overnight session should also underpin prices and the weekly export sales report were better than expected and could also provide support, a floor trader said.

 

The U.S. Department of Agriculture reported weekly corn export sales were 1.233 million metric tonnes for the week ended April 19, well above the 600,000-900,000 tonnes expected by analysts. Included in the total were sales of 127,100 metric tonnes for delivery in the 2007-08 crop year.

 

In the western U.S. Midwest, mainly dry conditions are forecast for Friday and Saturday, DTN Meteorologix Weather said. Temperatures are expected to average near-to-above normal Friday and above normal Saturday.

 

In the eastern sections of the region, drier weather is forecast for Friday with only a few light showers expected Saturday, Meteorologix Weather said. Temperatures are predicted to average near-to-below normal Friday and near-to-above normal Saturday.

 

In the 6-to-10 day outlook, temperatures are expected to average near-to-above normal, with precipitation near-to-above normal west and near-to-below normal east.

 

On daily technical charts, July corn gapped higher and bulls are regaining technical momentum with rain in the Corn Belt causing planting delays, a technical analyst said. Market bulls would gain better upside technical momentum by closing prices above the April high of US$3.93, with the bears gaining downside momentum by closing prices below US$3.72 1/2.

 

First resistance for July is seen at US$3.85 and then at US$3.91 1/4, Wednesday's high. First support is pegged at US$3.75 and then at US$3.72 1/2.

 

In other corn news, corn futures on China's Dalian Futures Exchange settled higher with the September contract up RMB/15 at RMB1,661/tonne.