June 22, 2006

 

CBOT Corn Outlook on Thursday: 1/2-1 cent higher on good export sales

 

 

Corn futures at the Chicago Board of Trade are forecast to start pit trading 1/2 to 1 cent higher Thursday, drawing support from continued consolidation after recent weakness and better than expected export sales, sources said.

 

In overnight e-CBOT trading, July corn slipped 1/2 cent to US$2.32 1/4 per bushel, and December also declined 1/2 cent to US$2.58 1/2.

 

Export sales were better than expected and the market could draw some support from the report, a floor analyst said.

 

The U.S. Department of Agriculture reported weekly corn export sales totaled 1,815.9 million metric tonnes for the week ended June 15, above analyst estimates of 1.1-1.6 million. Included in the total is 240,600 tonnes for delivery in the 2006-07 crop year.

 

The largest buyer was South Korea at over 379,000 metric tonnes.

 

The exports were decent, but the weather is still favorable for crop development. Market direction might be determined by the commodity funds and what they want to do, a commission house analyst noted.

 

In the western U.S. Midwest, scattered thunderstorms are forecast in Missouri Thursday, with scattered to widely scattered thundershowers Friday night into Saturday, favoring the northern areas of the region, DTN Meteorologix Weather said. Temperatures are expected to average near to above normal Thursday and near to below normal Friday and Saturday.

 

In the 6-to-10 day outlook temperatures and precipitation are expected to average near to below normal, DTN Meteorologix Weather said.

 

In the eastern U.S. Midwest, periods of showers and thunderstorms with amounts of 0.50-1.50 inches and locally heavier, are forecast for southern and east-central Illinois and central and southern Indiana and central and southern Ohio Thursday and Friday, DTN Meteorologix Weather said. Temperatures are predicted to average near normal north and above normal south Thursday and near to below normal Friday and Saturday.

 

In the 6-to-10 day weather outlook, rainfall is forecast near to below normal in western sections of the region and near to above normal east, with temperatures expected to average near to below normal.

 

Cash corn basis bids were mostly unchanged with central Illinois 2 cents higher at even the July future.

 

On technical charts, first resistance for July corn is pegged at Wednesday's high of US$2.33 1/2 and then at US$2.35 1/2. First support is seen at US$2.29 3/4, Wednesday's low and then at US$2.28, this week's low.

 

In other corn news, corn futures on China's Dalian Commodities Exchange finished slightly higher with the March contract up RMB7 to RMB1,482/tonne.