May 3, 2007

 

CBOT Corn Outlook on Thursday: 2-3 cents higher on weather outlook, firm e-CBOT

 

 

Chicago Board of Trade corn futures are expected to start day session trading 2-to-3 cents higher Thursday as continued concerns that wet weather will keep U.S. corn planting behind normal and firm prices in overnight trade will support prices, a floor analyst said.

 

In overnight electronic trading, May corn gained 3 cents to US$3.75 per bushel, July rose 3 1/4 cents to US$3.85 1/4 and December gained 3 cents to US$3.83 1/4. E-CBOT volume in July was 6,622 contracts.

 

Corn should begin higher on the wet weather forecasts but not all forecasts are in agreement so the gains could be tempered, a floor trader said. Although rain is expected in the U.S. Midwest over the next several days and next week, the amount of rain that is expected and the area that is to receive the moisture is "still partly up in the air," the trader said.

 

Trading is expected to be choppy which is normal for this time of year and with the uncertain forecast, a commission house analyst said.

 

Weekly corn export sales were "terrible", the analyst noted and could cap any gains with the lack of fresh news also seen limiting price movement, the analyst added.

 

The U.S. Department of Agriculture reported that weekly corn export sales were 655,300 metric tonnes for the week ended April 26, below the 800,000 to 1.1 million metric tonnes expected by analysts.

 

In the western U.S. Midwest, there is a chance for light to locally moderate showers on Friday with additional thundershowers on Saturday in the far west, DTN Meteorologix Weather said. Rainfall amounts in the period are expected to average .30-1.00 inch and locally heavier in southern and northwestern areas and .10-.50 inch elsewhere in the region. Temperatures are expected to average near-to-above normal Friday and above normal Saturday.

 

In the eastern sections of the region, there is a chance for showers and thundershowers in the west and southwest Friday and Saturday with rainfall potential of .25-1.00 inch and locally heavier for southern Illinois and southern Indiana. Rainfall of .10-.50 inch is possible in the rest of Illinois, central Indiana, southern Wisconsin and southern Ohio, Meteorologix Weather said. Temperatures are expected to average near-to-above normal.

 

In the 6-to-10 day outlook, temperatures are expected to average near-to-above normal, with rainfall near-to-above normal northwest and far east areas, near-to-below normal elsewhere in the region.

 

Deliveries posted against the May future were 948 contracts. Large issuers included the customer account of Iowa Grain which issued 289 contracts and the house account of Tenco which issued 282 contracts. Large stoppers included the house account of Tenco, which stopped 351 contracts, and the customer account of Morgan Stanley, which stopped 247 contracts. The last trade assigned was April 27.

 

On daily technical charts, July corn closed at a three-week high a technical analyst said.

 

First resistance for July is seen at US$3.83 1/2, Wednesday's high and then at US$3.85. First support is seen at US$3.80 and then at US$3.77 1/2.

 

In other corn news, Corn futures trading in China remains closed due to the May Day holiday.