June 14, 2007

 

CBOT Corn Outlook on Thursday: Up 4-6 cents on follow through, technical strength

 

 

Chicago Board of Trade corn futures are predicted to begin trading 4-to-6 cents higher Thursday as follow through buying from Wednesday and continued technical strength are expected to supply support for prices, analysts said.

 

In overnight electronic trading, July corn rose 6 cents to US$4.10 1/2 per bushel, September gained 5 1/2 cents to US$4.18 and December rallied 5 cents to US$4.20. E-CBOT volume in July was 6,208 contracts.

 

Corn should be higher based on the bullish technical pattern, a commission house analyst said. "It's a technical bull market, led by wheat futures that is feeding on itself," the analyst said.

 

The market was higher overnight and there should be additional follow through based off of the overnight activity, a floor trader said. In addition, the forecasts remain dry for the eastern U.S. Corn Belt over the next several days and weather forecasts for next week are mixed as to the amount of moisture that the U.S. Midwest will receive, the trader added.

 

In the western U.S. Midwest mainly dry weather is forecast for Friday and Saturday with only a few light showers possible, DTN Meteorologix Weather said. Temperatures are expected to average near-normal west and above normal east.

 

In the eastern U.S. Midwest, mainly dry weather is expected through Saturday with temperatures expected to average above normal with highs mostly in the upper 80's to low 90 degrees Fahrenheit.

 

In the 6-to-10 day outlook, temperatures are expected to average near-to-above normal. Rainfall is expected to average near-to-below normal, Meteorologix Weather said.

 

Weekly export sales were within the range of analyst estimates and were not expected to influence price direction, the trader said.

 

The U.S. Department of Agriculture reported that corn export sales for the week ended June 7 totaled 586,700 metric tonnes. Included in this total were sales of 54,800 tonnes for delivery in the 2007-08 marketing year.

 

On daily technical charts July corn closed near the session high and at a fresh 2 1/2 month high, a technical analyst said. Fresh technical and fund buying supported the bulls, the analyst added. Once corn prices push above major psychological resistance at US$4.00 per bushel larger price moves can occur. The bulls' next upside price objective is closing prices above solid technical resistance at US$4.15 per bushel with the bears' next downside objective closing prices below solid support at US$3.90 per bushel.

 

First resistance is for July corn is seen at US$4.06 1/4 - Wednesday's high - and then at US$4.10. First support is seen at US$4.00 and then at US$3.96.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled modestly higher with the benchmark September contract up RMB/8 at RMB1,633 per metric tonne.