July 20, 2006

 

CBOT Corn Outlook on Thursday: Up 1-2 cents as fund selling dwindles

 

 

Corn futures at the Chicago Board of Trade are predicted to begin open auction trading 1-2 cents higher Thursday as traders anticipate modest buying as speculative sales dwindled on Wednesday's close, floor sources said.

 

In overnight e-CBOT trading, September corn rose 1 1/2 cents at US$2.46 1/4 per bushel and December ended 1 1/4 cents higher at US$2.63.

 

Traders said with prices higher overnight and no fresh news to inspire that buying, it was attributed to late speculative buying on Wednesday's close.

 

On technical charts, bears still have the near-term technical advantage. Their next major near-term downside price objective is the June low of US$2.47 3/4. The next upside price objective for the bulls is closing prices above solid chart resistance at Tuesday's high of US$2.68 1/2. First resistance for December corn is seen at US$2.63 1/4 - Wednesday's high - and then at US$2.65. First support is seen at US$2.60 and then at US$2.57 1/2.

 

Near-term weather conditions were unchanged from prior forecasts, with traders saying the favorable conditions are already factored into the market.

 

A ridge breakdown is forecast to bring mild temperatures in the next few days, a commission house analyst said.

 

In the western U.S. Midwest, scattered thundershowers are expected in Missouri, but mainly dry in the rest of the region through Monday, DTN Meteorologix Weather said. Temperatures are expected to average near to above normal Friday and Saturday.

 

In the 6-10 day outlook, temperatures are expected to average above normal, possibly well above normal for a time, DTN Meteorologix Weather said.

 

In the eastern U.S. Midwest, scattered showers are expected in the region in the next 24-48 hours, DTN Meteorologix Weather said. Temperatures are expected to be near to above normal in the north and west-central areas Thursday and mostly below normal temperatures Friday and Saturday.

 

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

 

Traders say that despite U.S. corn export sales at the lowest point of the year, they aren't expected to affect the market.

 

The U.S. Department of Agriculture reported U.S weekly corn export sales at 632,600 thousand metric tonnes for 2005-2006 season in the week ended July 13. Analysts had estimated 550,000-800,000 metric tonnes of corn would be reported. The largest buyers were Egypt, Taiwan and the Korean Republic.

 

In overseas trade, corn futures on China's Dalian Commodities Exchange settled higher. The most widely held March 2007 contract settled at RMB1, 423/tonne, up RMB2.