June 2, 2006

 

CBOT Corn Outlook on Friday: Firm start on exports, outside markets

 

 

Corn futures at the Chicago Board of Trade are expected to begin open auction trading firm Friday as a combination of factors are expected to prove underlying support, sources said.

 

In overnight e-CBOT trading, July corn declined 1/2 cent to US$2.54 per bushel and December fell 1 1/4 cents to US$2.79 1/2.

 

Corn export sales were good, the outside markets are higher and the dollar is weaker, which should support prices, a commission house analyst said.

 

In addition, the funds were light buyers Thursday and could again provide buying interest, he added.

 

The U.S. Department of Agriculture reported that weekly corn export sales were 1,234.1 million metric tonnes for the week ended May 25, above the upper end of analyst's estimates.

 

Export sales were good and people are watching the weather, said Don Roose, president of US Commodities in West Des Moines, Iowa. The 6-10 day and the 11-16 day forecasts look a little bit drier today than Thursday.

 

This time of the year, people are always watching for heat. Any heat can suck up the rain pretty fast, he added.

 

Mainly dry weather is forecast in the western U.S. Midwest on Friday and Saturday with a chance for a few light thundershowers Sunday and a chance for scattered showers and thundershowers Monday and Tuesday, DTN Meteorologix Weather said. Temperatures are expected to average above normal.

 

In the eastern U.S. Midwest, showers may linger in the southeast and far eastern areas, otherwise mainly dry conditions are forecast for the weekend, DTN Meteorologix Weather said. Temperatures are forecast to average near to below normal.

 

On technical charts, July corn futures had a bullish "outside day" on the daily bar chart but bulls still have to fill a downside price gap above US$2.59 1/2 to regain better upside technical momentum, a technical analyst said. He sees first resistance for July at US$2.55 3/4 and then at US$2.57 3/4. First support is pegged at US$2.52 and then at US$2.50.

 

Cash corn basis bids are mixed Friday morning. Central Illinois was unchanged at 11 cents under July and Evansville, Ind., was up 1 cent at 8 cents under July.

 

In other corn news, corn futures on China's Dalian Commodities Exchange ended higher on bargain hunting, sources said, with the benchmark March 2007 contract up RMB/10 to RMB1,510/tonne.