May 11, 2006

 

CBOT Corn Outlook on Thursday: Up 1-2 cents on consolidation, good exports

 

 

Corn futures at the Chicago Board of Trade are expected to start open auction trading 1-2 cents higher Thursday as the market consolidates ahead of Friday's supply and demand report and supportive export sales, floor sources said.

 

In overnight e-CBOT trading, July corn rose 2 1/4 cents to US$2.42 1/4 per bushel and December corn rose 2 3/4 cents to US$2.68.

 

"Everything points higher, therefore we'll start out higher", a floor trader said.

 

Export sales were above analysts expectations, there is a report out Friday and the market should continue to consolidate, he added.

 

The U.S. Department of Agriculture reported weekly corn export sales were 1,105.1 million metric tonnes, above the 600,000-1.0 million tonnes forecast by analysts.

 

On Friday the USDA will release the supply and demand report for both the 2005-06 and 2006-07 crop years.

 

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 billion estimated by the USDA in April.

 

The average ending stocks estimate for 2006-07 is 1.582 billion bushels.

 

Outside markets are higher and that should be supportive, plus the cold and rainy weather in parts of the U.S. Midwest should delay planting and slow the emergence of the crop, a floor analyst said.

 

In the western U.S. Midwest, mainly dry conditions are forecast from late Friday through Monday in the region after a chance for a little light rain in the east Thursday and early Friday, DTN Meteorologix Weather said. Temperatures are expected to average below to well below normal.

 

In the eastern U.S. Midwest, showers and rain continue from Thursday into Friday night with a few showers possible on Saturday in northern and eastern areas of the region, DTN Meteorologix Weather said. Scattered showers are possible east on Sunday and Monday. Temperatures are forecast to average below to well below normal in the period, DTN Meteorologix Weather added.

 

Deliveries posted against the May contract were 1,979 contracts. Issuers included the customer account of Man Financial, which issued 557 contracts, the customer account of Dowd Wescott, which issued 298 contracts and the customer account of Dorman Trading, which issued 259 contracts.

 

Stoppers included the customer account of Man Financial, which stopped 637 contracts, the Dowd Westcott Group, which stopped 266 contracts and the customer account of RJ O'Brien which stopped 286 contracts.

 

On technical charts, it will take a close above resistance above US$2.46 in July to give the bulls some fresh technical momentum, while a close below US$2.35 1/2 would produce some near-term chart damage, a technical analyst said. First resistance for July corn is seen at US$2.43, and then at US$2.45. First support is pegged at US$2.39 1/4 and then at US$2.37 1/2, he added.

 

In other corn news, the Taiwan Sugar Corp. passed on its tender for 23,000 metric tonnes of U.S. corn, a trader in Taipei said.

 

Corn futures on China's Dalian Commodities Exchange ended mixed, with the January contract settled up RMB/1 higher at RMB 1,474/tonne.