July 6, 2006

 

CBOT Corn Outlook on Thursday: 1-2 cents higher on forecasts, consolidation

 

 

Corn futures at the Chicago Board of Trade are called to begin pit trading 1-2 cents higher Thursday as overnight weather forecasts are expected to support prices, sources said.

 

In overnight e-CBOT trading, July corn rose 1/2 cent to US$2.40 per bushel and December gained 2 cents to US$2.66 1/2.

 

The market is dominated by confusion about the weather, a commission house analyst said. The forecasts keep flipping on whether a ridge will limit rainfall this weekend and some forecasters have the ridge keeping rain out of the Midwest until next week, he added.

 

The market should see a correction from Wednesday's trade, a floor analyst noted. The weather can be viewed as either bullish or bearish, so the market will continue to consolidate at these price levels. Much of Iowa and Nebraska are expected to be dry over the next several days and that could lend support, he added.

 

In the western U.S. Midwest, dry conditions are forecast through early Saturday with a chance for a few showers developing later that day, DTN Meteorologix Weather said. An additional chance for showers is possible on Sunday in the southern section of the region. Temperatures are expected to average near to above normal during the weekend.

 

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

 

In the eastern U.S. Midwest, mostly dry weather is forecast Friday and Saturday with a chance for scattered to widely scattered showers on Sunday and Monday, DTN Meteorologix Weather said. Temperatures are expected to average near to above normal Saturday through Monday.

 

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

 

Deliveries posted against the July contract Thursday totaled 1,906 contracts. The customer account of ABN Amro issued 467 contracts and the customer account of O'Connor issued 312 contracts. Large stoppers included the customer account of Man Financial which stopped 411 contracts and the customer account of Dowd Wescott, which stopped 210 contracts.

 

On technical charts, no chart damage occurred Wednesday and bulls still have decent upside technical momentum, a technical analyst said. The next upside price objective for the bulls is closing prices in December above chart resistance at Monday's high of US$2.70, he said. First resistance for December corn is seen at US$2.66 and then at Wednesday's high of US$2.68 1/4. First support is seen at US$2.63 and then at US$2.62.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled lower, on spillover weakness from soybeans, sources said. The March contract slipped RMB4 to RMB1,458/tonne.

 

Thursday morning, the U.S. Department of Agriculture is scheduled to release the weekly export inspections. The report has been delayed due to computer problems.

 

On Friday, the weekly export sales report is scheduled for release. The report is delayed a day due to the holiday.