April 27, 2006

 

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

 

 

Corn futures at the Chicago Board of Trade are expected to start trading 1-2 cents lower Thursday following the tone set in overnight activity, weaker outside markets and news that China raised lending rates, sources said.

 

In overnight e-CBOT trading, May corn fell 1 1/2 cents to US$2.30 per bushel, July also declined 1 1/2 cents to US$2.41 3/4, and December declined 2 1/2 cents to US$2.63 3/4.

 

The outside markets are lower, and corn was weaker overnight on the China news, so the market could see some follow through, a floor analyst said.

 

News that China raised lending rates was viewed negatively with floor analysts noting the move could slow down the Chinese economy and reduce the need for raw materials, including grains.

 

The U.S. Department of Agriculture reported that weekly corn export sales totaled 782,400 metric tonnes for the 2005-06 marketing year for the week ended Apr. 20. This was near the lower end of the range of estimates of 700,000-1.0 M metric tonnes.

 

Japan was the largest buyer at 268,700 metric tonnes followed by South Korea at 210,200 tonnes. Sales for the 2006-07 marketing year totaled 16,300 tonnes

 

In the western Midwest rain and thunderstorms are forecast to develop in the west Friday and Saturday with rainfall expected to average .50-2.00 inches and locally heavier, across Missouri, Iowa, and eastern Nebraska, DTN Meteorlogix Weather said. Sprinkles and light showers are forecast for Sunday

 

In the eastern Midwest rain and thunderstorms are possible during Saturday and showers and light rain lingers in the region on Sunday, DTN Meteorlogix Weather said. Rainfall is forecast to average .25-1.00 inch and locally heavier. Temperatures are forecast to average near to below normal west and above normal east on Saturday, DTN Meteorlogix Weather said.

 

On technical charts, first resistance for July corn is pegged at US$2.44 3/4 - Wednesday's high - and then at US$2.48. First support is seen at this week's low of US$2.41 and then at US$2.40, a technical analyst said.

 

In other corn news, Taiwan's Member Feed Industry Group, or MFIG, is seeking 60,000 metric tonnes of U.S. origin corn in a tender to be concluded Friday, a company official said Thursday.

 

Corn futures on China's Dalian futures exchange ended higher with the January contract up 17RMB/tonne at RMB1,423/tonne.