August 30, 2007

 

CBOT Corn Outlook on Thursday: 3-4 cents higher on overnight gains, wheat

 

 

Chicago Board of Trade corn futures are predicted to start trading 3-to-4 cents higher Thursday, underpinned by the gains established in overnight activity and the sharp rally in wheat futures in the overnight session, analysts said.

In overnight electronic trading, September corn gained 3 cents to US$3.25 3/4 per bushel and December rose 2 1/2 cents to US$3.42 3/4. E-CBOT volume in December was 21,849 contracts.

 

Corn was higher overnight and should begin daytime trading higher as well given the gains in wheat futures, an analyst said. In overnight trading December wheat rose 23 cents to US$7.81 1/2. Better-than-expected weekly corn export sales might also add support, the analyst said.

 

The U.S. Department of Agriculture reported weekly corn export sales were 1.6 million metric tonnes for the week ended Aug. 23. Included in this total were sales of 173,000 tonnes for delivery in the 2006-07 marketing year. Analysts had expected sales between 700,000-1.2 million metric tonnes.

 

The export sales should supply some support for corn, a commission house analyst said. However, the impending increase in supplies as the harvest fast approaches will limit the gains in the market, with the weather favorable for harvest activities, the analyst said.

 

Warmer and drier weather is likely in the next seven days, helping conditions improve in the northern and western areas of the U.S. Midwest, DTN Meteorlogix Weather said.

 

In the western U.S. Midwest mainly dry weather is forecast through Saturday with temperatures averaging near-to-above-normal Friday and Saturday.

 

In the eastern U.S. Midwest mainly dry weather is expected Friday and Saturday with temperatures averaging near-to-slightly below normal in the period, Meteorlogix Weather said.

 

In the 6-to-10 day forecast, temperatures are expected to average near-to-above normal and rainfall is forecast to average near-to-above normal north and near-to-below normal south.

 

On daily technical charts, December corn closed at a fresh two-week low and near the session low on Wednesday, a technical analyst said. The U.S. corn harvest is starting and that is seasonally bearish. The lack of fresh bullish news is also limiting upward price movement, the analyst said. The bulls' next upside price objective is to push prices above solid resistance above US$3.50 in December with the bears' next objective closing prices below support at US$3.36.

 

First resistance for December corn is seen at US$3.46 3/4 and then at US$3.50. First support is seen at Wednesday's low of US$3.39 and then at US$3.35.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled modestly higher with the benchmark May contract up RMB/17 at RMB1,623 per metric tonne.