May 10, 2006

 

CBOT Corn Outlook on Wednesday: Seen 1-2 cents higher, following e-CBOT

 

 

Corn futures at the Chicago Board of Trade are forecast to begin pit trading 1-2 cents higher following the tone set in overnight trading, sources said.

 

In overnight e-CBOT trading, July corn rose 2 1/4 cents to $2.40 1/4 per bushel and December corn rose 2 cents to $2.65.

 

The was not much in the way of fresh news out overnight, but corn could be supported by the firm tone in soybeans in overnight electronic trading, a floor analyst said.

 

In addition, the near term weather forecast calls for cool and rainy conditions in parts of the region which could impact some planting and delay emergence, he added.

 

A floor trader noted the market could see some consolidation ahead of the supply and demand report on Friday, a floor trader said.

 

The U.S. Department of Agriculture is scheduled to release the May supply and demand report for the 2005-06 and 2006-07 crop years on Friday at 7:30 a.m. CDT (1230 GMT).

 

An average of 14 analysts surveyed by Dow Jones Newswires expects 2005-06 corn ending stocks at 2.265 billion bushels, 36 million below the 2.301 estimated by the USDA in April.

 

The average ending stocks estimate for 2006-07 was 1.582 billion bushels. This will be the first ending stocks estimate issued by the USDA for the 2006-07 crop year.

 

In the western U.S. Midwest, episodes of light showers with some rain or drizzle are possible in parts of the region over the next several days, DTN Meteorologix Weather said. Amounts should average a trace to .50 inch. Mostly dry weather is forecast for Saturday and Sunday. Temperatures are forecast much below normal Thursday and Friday, DTN Meteorologix Weather said.

 

In the eastern U.S. Midwest, there is a chance for rain and thunderstorms with the heaviest of this activity occurring Wednesday night into Thursday with rainfall potential of .50-2.00 inches, DTN Meteorologix Weather said. Temperatures on Thursday and Friday are expected well below normal. Episodes of scattered showers are forecast for Saturday and Sunday, favoring the east and north, DTN Meteorologix Weather said.

 

Deliveries posted against the May contract totaled 2,291 contracts. Issuers included the customer account of Man Financial, which issued 522 contracts, the house account of Shatkin, which issued 224 contracts and the customer account of Dowd Wescott, which issued 314 contracts.

 

Stoppers included the customer account of Man Financial, which stopped 557 contracts, the Dowd Wescott Group, which stopped 298 contracts and the customer account of Dorman Trading which stopped 259 contracts.

 

On technical charts, first resistance for July corn is seen at $2.40, Tuesday's high and then at $2.42, a technical analyst said. First support is pegged at $2.37 1/2 and then at $2.35 1/2, he added.

 

In other corn news, cash corn prices in China rose slightly from two weeks ago as reduced stockpiles during the recent week-long holiday and rising feed demand encouraged traders and feed producers to increase their purchases, sources said Wednesday.

 

Corn futures on China's Dalian Commodities Exchange settled higher as the rising price of corn on the spot market helped support futures, sources said. The January contract settled up RMB/11 higher at RMB 1,473/tonne.