May 24, 2006

 

CBOT Corn Outlook on Wednesday: 1/2-1 cent lower on weather, outside markets

 

 

Corn futures at the Chicago Board of Trade are forecast to begin open outcry trading 1/2 to 1 cent lower as favorable near term weather and lower outside markets are expected to weigh on futures, sources said.

 

In overnight e-CBOT trading, July corn slipped 1 cent to US$2.52 per bushel and December corn fell 1 1/4 cents to US$2.76 1/4.

 

Short-term, the weather is favorable to crop development, a floor source said. The U.S. Midwest received rain overnight and the forecast is for some additional moisture with warmer temperatures to follow, the source said. That will help the crop.

 

In addition, precious metals markets and crude oil futures are lower, which could also impact prices on the down side, a floor analyst noted.

 

News that Informa Economics estimated 2006-07 corn acreage at 79.8 million acres was near market expectations of around 80 million acres and should not have much of an impact, the analyst added.

 

In March, the U.S. Department of Agriculture estimated 2006-07 corn acreage at 78.019 million acres.

 

In the western U.S. Midwest, scattered thunderstorms with amounts of .10-.75 inch are possible in northern and eastern areas of the region Wednesday, with dry conditions or only a few light showers on Thursday, DTN Meteorologix Weather said. Temperatures are expected to average above normal.

 

In the eastern U.S. Midwest, scattered showers and thundershowers are forecast Wednesday and Thursday with amounts .25-1.00 inch and locally heavier, DTN Meteorologix Weather said. Temperatures are expected to average above normal Wednesday and Thursday in the region, DTN Meteorologix Weather noted.

 

On technical charts, a push below support at the bottom of a price gap at US$2.47 1/2 in July corn would produce more near-term chart damage, a technical analyst said. First resistance for July corn is pegged at US$2.56 and then US$2.57 1/2. First support is seen at US$2.50 1/2 and then at US$2.48 1/2, this week's low.

 

In other corn news, corn prices in China were little changed in the week ended Wednesday as feed producer supplies increased, Chinese traders said.

 

Taiwan Sugar Corp. bought 23,000 metric tonnes of U.S. origin corn from trading firm Agrex in a tender concluded Wednesday, a trader in Taipei said.

 

Corn futures on China's Dalian Commodities Exchange ended higher on rising cash values, sources said. The March contract rose RMB/17 higher at RMB 1,519/tonne.