July 13, 2006

 

CBOT Corn Outlook on Thursday: 2-4 cents lower following e-CBOT activity

 

 

Corn futures are expected to begin pit trading 2-4c lower Thursday, following the tone established overnight with trading expected to be choppy, floor sources said.

 

In overnight e-CBOT trading, July corn fell 2 1/2 cents to US$2.56 3/4 per bushel and December corn fell 5 cents to US$2.79.

 

There seems to be no rhyme or reason to the market right now, a commission house analyst said. The overnight weather forecasts were largely unchanged from earlier outlooks but corn was weaker overnight. Trading could be very choppy and the market should take its direction from what the funds want to do after being big buyers on Wednesday, he added.

 

In the western U.S. Midwest, there is a chance for a few thunderstorms with amounts of .25-1.00 inch Thursday night into Friday morning, DTN Meteorologix Weather said. Temperatures are expected to be above to well above normal Friday and Saturday with high temperatures possibly reaching 95-100 degrees Fahrenheit Saturday. Mostly dry weather continues on Sunday with isolated thundershowers in the north and east on Monday. Temperatures will remain at above-normal levels with highs of 95-102 degrees Sunday and 90-99 degrees on Monday, DTN Meteorologix Weather said.

 

In the 6-to-10-day outlook, temperatures are expected to average above to well above normal and precipitation near below normal.

 

In the eastern U.S. Midwest, scattered showers and thundershowers, with amounts of .25-1.00 inch and locally heavier, are possible in the Ohio River valley Thursday through Saturday, with widely scattered thundershowers possible Friday and Saturday in the region, DTN Meteorologix Weather said. Temperatures are forecast near to above normal Thursday and Friday and above normal Saturday with highs in the upper 80s and low 90 degrees Fahrenheit. Mostly dry conditions are forecast for Sunday with high temperatures ranging from the upper 80s to middle 90s, DTN Meteorologix Weather said.

 

In the 6-to-10-day outlook, temperatures are expected to average above normal and rainfall near to below normal.

 

The U.S. Department of Agriculture reported weekly corn export sales totaled 668,600 metric tonnes for the week ended July 6, below the 700,000-1.0 million tonnes expected by analysts. The total includes 79,400 metric tonnes for delivery in the 2006-07 crop year.

 

Deliveries posted against the Chicago Board of Trade July corn contract Thursday were 1,559 contracts. The customer account of Man Financial issued 718 contracts and stopped 168 contracts and the customer account of the Combs division of Cunningham issued 221 contracts and stopped 219. The house account of Tenco stopped 151 contracts. Preliminary open interest in July is 3,069 contracts as of Wednesday, July 12.

 

On technical charts, prices hit a six-week high and had a bullish "outside day" up on daily technical charts, a technical analyst said. The next upside price objective in December corn remains closing prices above solid resistance at US$2.87 1/4, he added. First resistance for December corn is seen at US$2.84 1/2 and then at US$2.87 1/4. First support is pegged at US$2.80, and then at US$2.77.

 

In other corn news, French corn ending stocks are expected to be tight and prices will need to increase in an attempt to ration demand, Strategie Grains said in a monthly report released Thursday. The tight French stocks situation is in contrast with the ample corn situation forecast in Hungary, Czech Republic and Slovakia, Stategie Grains said.

 

Taiwan's Member Feed Industry Group, MFIG purchased 60,000 metric tonnes of U.S.-origin corn from Agrex in a tender concluded Thursday, a group official said.

 

Corn futures on China's Dalian Commodities exchange ended lower, with March down RMB6 at RMB1,426/tonne.