July 26, 2007

 

CBOT Corn Outlook on Thuesday:Up 3-5 cents; wheat spillover, weather forecast

 

 

Chicago Board of Trade corn futures are expected to start Thursday's day session 3 to 5 cents higher as a follower of wheat and on friendly overnight weather forecasts, analysts said.

 

In overnight electronic trading September corn gained 4 cents to US$3.15 1/2 per bushel, and December rose 4 1/4 cents to US$3.31. E-CBOT volume in December was 2,893 contracts.

 

Corn should open higher on spillover support from the wheat market, analysts said. Wheat prices are expected to open 10 cents higher and test contract highs after strong export sales numbers were released Thursday morning, a trader said. Corn's export sales were weaker than expected, but should still follow a rise in wheat, traders said.

 

The U.S. Department of Agriculture reported 2007-2008 weekly export corn sales were 793,400 metric tonnes for the week ending July 19, below the 800,000-1.2 million metric tonnes expected.

 

USDA also announced private exporters reported a sale of 113,792 metric tonnes of U.S. corn to Japan and 120,000 metric tonnes to unknown destinations for delivery in the 2007-08 marketing year.

 

The overnight forecasts were more supportive for corn, removing some expected moisture in the northwestern corn belt through Saturday, a trader said. Spotty rains are expected in the western corn belt through Saturday, and then should be followed by warmer, drier temperatures next week, a trader said.

 

In the western U.S. Midwest, weather forecasts call for a chance of thundershowers in the north late Thursday, scattered thundershowers south Thursday night and Friday, with showers lingering in the south, and fair conditions north Saturday. Rainfall potentials are 0.25-1.00 inch in the east and 0.10-0.50 inch in the west, DTN Meteorologix said. Sunday and Monday will be mostly dry.

 

Temperatures in the region should average above normal Thursday and near-to-above normal Friday through Sunday.

 

In the eastern U.S. Midwest, weather forecasts predict a chance for scattered showers and a few thundershowers late Thursday for the eastern and far north locations, and scattered showers and thundershowers through much of the region during Friday. Showers may linger near the Ohio River early Saturday. Rainfall should average 0.30-1.00 inch. Sunday and Monday will be mainly dry. Temperatures in the region will average near-to-above normal west and below normal east Thursday, near-to-above normal Friday, near-to-below normal Saturday and Sunday.

 

The 6-10 day outlook calls for rainfall near-to-below normal and temperatures averaging near-to-above normal.

 

On daily technical charts, Wednesday closed nearer the session low. There is not much fresh news for corn traders. Near-term weather in the Corn Belt is deemed benign and that is bearish. But ideas of rock-solid USDA weekly export sales data on Thursday morning did limit selling interest Wednesday, as did longer-term weather forecasts for the Corn Belt that are calling for hotter and drier conditions.

 

The next downside price objective for the bears is to close prices below solid support at this week's low of US$3.24 1/2. The bulls' next upside price objective is closing prices above solid technical resistance at US$3.40. First resistance for December corn is seen at this week's high of US$3.32 1/4 and then at US$3.36. First support is seen at this week's low of US$3.24 1/2 and then at US$3.20.

 

In other corn news, corn futures on China's Dalian Commodities Exchange were mixed with the benchmark January contract up RMB3 at RMB1,484 per metric tonne.