May 31, 2007

 

CBOT Corn Outlook on Thursday: Up 1-2 cents on follow through, weather concerns

 

 

Chicago Board of Trade corn futures are expected to begin daytime trading 1 to 2 cents higher Thursday, supported by follow through buying from Wednesday and continued weather concerns, analysts said.

 

In overnight electronic trading, July corn rose 1 3/4 cents to US$3.84 per bushel, September slipped 1/4 cent to US$3.84 1/2 and December ended unchanged at US$3.81 1/4. E-CBOT volume in July was 8,115 contracts.

 

The market should be supported by follow through buying from Wednesday's strong gains, an analyst said. Wednesday the funds were strong buyers and could support the market again on Thursday. In addition, speculative buying with July corn rallying to three-week highs could also underpin prices, he added.

 

The longer-term weather picture is unsettled with continued ideas that the mid-June period could see a ridge bring warm and dry weather to the U.S. Midwest, a trader said. Although near-term weather indicates rain in parts of the region, the market is looking ahead, and the mid-day weather updates could influence price direction as well, the trader said.

 

In the western U.S. Midwest, scattered showers are possible Saturday and dry weather with only a few light showers are possible on Sunday, DTN Meteorologix Weather said. Temperatures are expected to average above normal Saturday and below normal Sunday.

 

In the eastern U.S. Midwest, there is a chance for a few light showers through Saturday in western areas with eastern sections possibly developing light showers on Saturday, Meteorologix Weather said. Scattered light to locally moderate showers with amounts of 0.10-0.50 inch are possible Sunday into Monday. Temperatures are expected to average near-to-below normal in the period.

 

In the 6- to 10-day outlook, temperatures are expected to average below normal northwest and near-to-above normal elsewhere in the region. Rainfall is expected to average near- to above-normal north and near-to-below normal south.

 

On daily technical charts July traded to a three-week high on daily technical charts as bulls regained upside momentum Wednesday, a market technician said. Trading should remain choppy and within the range established in May unless weather patterns confirm hot and dry conditions in the Corn Belt, the technician said. The next upside price objective for the bulls is closing prices above the May high of US$3.96 1/2, with the next downside objective for the bears is closing prices below solid support at this week's low of US$3.63 1/4 per bushel.

 

First resistance for July is seen at US$3.84, Wednesday's high and then at US$3.91. First support is seen at US$3.80, and then at US$3.75.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled higher with the benchmark September contract up RMB12 at RMB1,662 per metric tonne.

 

South Korea bought 220,000 metric tonnes of U.S. corn in a tender concluded Thursday, a commission house reported Thursday.

 

The U.S. Department of Agriculture is scheduled to release the weekly export sales report for the week ending May 24 on Friday at 8:30 a.m. EDT. The report is delayed a day due to the holiday.