June 29, 2006

 

CBOT Corn Outlook on Thursday: 1-2 cents higher on before USDA reports

 

 

Corn futures at the Chicago Board of Trade are predicted to begin pit trading 1-2 cents higher Thursday as the market consolidates ahead of Friday's U.S. Department of Agriculture planting and stocks reports, sources said.

 

In overnight e-CBOT trading, July corn rose 2 cents to US$2.28 per bushel and December ended up 2 1/4 cents at US$2.54 1/4.

 

The market should consolidate ahead of the reports, a commission house analyst said. People will buy looking to even up their positions and its the end of the month and the end of the quarter, he added. Trading could be two-sided with a trend towards short covering, he added.

 

The USDA reported weekly corn export sales were 2,027.6 million metric tonnes for the week ended June 22, above the 1.2-1.750 million tonnes expected by analysts. Included in the total were sales of 673.8 thousand metric tonnes for delivery in the 2006-07 crop year which begins September 1.

 

A floor trader noted the exports should provide some additional support, continuing the recent export demand for U.S. corn.

 

The longer term forecasts this morning has a ridge building heat back into the U.S. Midwest but the near term outlook is still favorable for crop development, a floor analyst noted.

 

The floor is like a huge waiting room, everyone is waiting on the USDA reports Friday, the floor trader 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, compared to the 4.321 billion in June, 2005.

 

In the western U.S. Midwest, there is a chance for a few thundershowers Friday or early Saturday in the northern and eastern areas of the region, DTN Meteorologix Weather said. Amounts will be .10 -.50 inch but with coverage of only 30%. Temperatures are expected above normal Friday and Saturday. Scattered showers, with amounts of .10-.50 inch and locally heavier are predicted for Sunday into Monday, with temperatures above normal Sunday and near to below normal Monday, DTN Meteorologix Weather said.

 

In the eastern U.S. Midwest, there is a chance for a few thundershowers in the west Thursday night into Friday with an additional chance through north and east areas Friday into Saturday, DTN Meteorologix Weather said. Rainfall could average .10-.50 inch, but with coverage of only 30%-40%. Temperatures are expected to average near to below normal Friday and near to above normal Saturday. There is also a chance for a few shower on Sunday and scattered showers and thundershowers on Monday, DTN Meteorologix Weather said.

 

On technical charts, the market is still short-term oversold and due for more of an upside bounce soon, a technical analyst said. First resistance for December corn is seen at US$2.55, Wednesday's high and then at US$2.57. First support is pegged at US$2.50 and then at US$2.45.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled mixed with the March contract down RMB1 to RMB1,471/tonne.