June 28, 2006

 

CBOT Corn Outlook on Wednesday: Steady, waiting on weather outlooks, USDA

 

 

Corn futures at the Chicago Board of Trade are expected to begin open auction trading Wednesday steady as the market looks ahead to Friday's U.S. Department of Agriculture reports and weather forecasts ahead of the U.S. crop's critical pollination phase which begins next month, sources said.

 

In overnight e-CBOT trading, July corn ended 1/4 cent higher at US$2.25 1/2 per bushel and December slipped 3/4 cent at US$2.50 1/2.

 

The weather remains the dominant feature, said Don Roose, of US Commodities in West Des Moines, Iowa. The weather in much of the U.S. Midwestern corn belt has been in a cool pattern recently but it looks like the maps are turning warmer and drier so there remain concerns about the weather ahead of the crop's pollination phase.

 

The market could also see evening up of positions ahead of Friday's USDA reports, he added.

 

The USDA is scheduled to release its June acreage and quarterly stocks reports at 7:30 a.m. CDT (1230 GMT) Friday.

 

The average of 20 analysts surveyed by Dow Jones expect U.S. corn acreage at 79.797 million acres, above the 78.019 forecast by the USDA in March, but below the 81.759 million planted in 2005.

 

The average of 13 analysts surveyed expect quarterly U.S. corn stocks at 4.362 billion bushels, little changed as compared to the 4.321 billion in June, 2005.

 

The market is waiting on fresh weather forecasts and the USDA reports, a floor trader said. In addition, export sales are due out Thursday and Friday is first notice day for July futures, he added.

 

In the western U.S. Midwest, mainly dry weather with only a few light showers is predicted through Friday, DTN Meteorologix Weather said. A few showers and possible thundershowers are possible during the weekend. Temperatures are predicted to average near to above normal Thursday, above normal Friday and near to above normal Saturday, DTN Meteorologix Weather said.

 

In the eastern U.S. Midwest, mainly dry weather is expected Thursday with a chance for a few thundershowers on Friday, with mainly dry conditions on Saturday, DTN Meteorologix Weather said. Temperatures are expected to average near to above normal Thursday through Saturday.

 

Cash corn basis bids were mixed with Burlington, Iowa, up 5 cents at 17 cents under the July future.

 

On technical charts, the next downside price objective in December is closing prices below chart support at the January low of US$2.41 1/4, a technical analyst said. It will take a close above resistance at US$2.60 to provide the bulls with some fresh upside technical momentum, he added. First resistance for December corn is pegged at US$2.52, the week's high and then at US$2.54 3/4. First support is pegged at US$2.47 3/4, and then at US$2.45.

 

In other corn news, cash corn prices in China remained steady in the week ended Wednesday with little change in either supply or demand, sources said.

 

Feed demand in the south is picking up but the recovery is slow, sources in China said.

 

Corn futures on China's Dalian Commodities Exchange ended mostly higher with the March contract up RMB5 to RMB1,472/tonne.