May 24, 2007

 

CBOT Corn Outlook on Thursday: Up 1-2 cents, following overnight theme

 

 

Chicago Board of Trade corn futures are expected to begin trading 1 to 2 cents higher Thursday, following the tone established in overnight trade, but hampered by conflicting near-term weather forecasts ahead of a long holiday weekend, analysts said.

 

The CBOT will be closed Monday in observance of Memorial Day.

 

In overnight electronic trading, July corn gained 2 1/4 cents to US$3.70 3/4 per bushel, September rose 1/2 cent to US$3.72 and December gained 1/4 cent to US$3.70 3/4. e-CBOT volume in July was 7,763 contracts.

 

Corn should start out a little higher based off the overnight session, but trading should be choppy and two-sided, an analyst said. The western U.S. Midwest reported good rains overnight but the eastern half of the region remains dry and the near-term forecasts are mixed as to the chances of rain this weekend, the analyst added.

 

In the western U.S. Midwest scattered showers and thundershowers are expected through Saturday with amounts between 0.50-1.50 inches and locally heavier in southern and eastern areas of the region and 0.25-0.75 inch expected northwest, DTN Meteorologix Weather said. Temperatures are expected to average below normal Friday and Saturday.

 

In the eastern U.S. Midwest, scattered showers with amounts 0.10-0.50 and locally heavier are possible in western and northern areas Friday and Saturday, with mainly dry weather forecast Sunday, Meteorologix Weather said. Temperatures are expected to average near-to-below normal Friday and Saturday.

 

In the 6- to 10-day outlook, temperatures are expected to average near normal, while rainfall should average near-to-below normal.

 

The focus remains on the weather with the market looking to the mid-day weather forecasts for direction, a floor trader said. Corn trading should be choppy and two-sided until the updated forecasts. There is little fresh news out besides weekly export sales and they were in line with expectations, the trader added.

 

The U.S. Department of Agriculture reported weekly corn export sales totaled 1.071 million metric tonnes for the week ended May 17, in line with analyst expectations of 800,000-1.2 million tonnes. Included in the total were sales of 413,100 tonnes for delivery in 2007-08.

 

On daily technical charts, July closed near the session low Wednesday as the market looks to trade within the May trading range of US$3.54 to US$3.96 1/2 in the near term, a technical analyst said.

 

First resistance for July is seen at US$3.70, and then at US$3.75. First support is seen at Wednesday's low of US$3.67 1/4 and then at US$3.65.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled mixed with the benchmark September contract up RMB2 at RMB1,675 per metric tonne.