July 27, 2006

CBOT Corn Outlook on Thursday: Steady to 1/2 cent lower

Corn futures at the Chicago Board of Trade are predicted to begin open auction trading steady to 1/2 cent lower Thursday, floor sources said.

Heat and rain in the weather forecast are expected to promote further fund selling, an analyst said.

In overnight e-CBOT trading, September corn fell 1/4 cent to US$2.35 3/4 per bushel and December ended 1/2 cent lower at US$2.52 1/4.

On technical charts, last week's low of US$2.51 is still strong technical support. A close below that level would produce more chart damage. The next major near-term downside price objective is the June low of US$2.47 3/4. The next upside price objective is closing prices above chart resistance at this week's high of US$2.60 3/4. First resistance for December corn is seen at US$2.56--Wednesday's high - and then at US$2.58. First support is seen at US$2.52 1/2 - Wednesday's low - and then at US$2.51.

Weather forecasts are largely unchanged, with high temperatures and scattered showers for the corn belt as the critical pollination period winds down.

In the western U.S. Midwest, forecasts predict dry weather Friday and Saturday with highs from the low to upper 90s, DTN Meteorologix Weather said. Temperatures are predicted to range from the middle 90s to 100F Sunday and Monday, with a chance of scattered thunderstorms developing late Monday

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

In the eastern U.S. Midwest, there is a chance for scattered showers and thundershowers of 0.25-1.00 inch and locally heavier through the Ohio River Valley Friday, DTN Meteorologix Weather said. High temperatures may reach the low to middle 90s by Saturday. Forecasts show mainly dry weather with possible isolated thundershowers Sunday with temperatures above to well above average over the weekend.

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

In overseas trade, corn futures settled lower on China's Dalian Commodity Exchange Wednesday. The most widely held May 2007 contract settled at RMB1,409/tonne, down RMB3.