September 6, 2007

 

CBOT Corn Outlook on Thursday: Down 1-3 cents on wheat decline, crop estimates

 

 

Chicago Board of Trade corn futures are expected to begin day session trading 1-to-3 cents lower Thursday, following weakness in overnight trading and on spillover from sharp losses set in wheat futures in the overnight session, analysts said.

 

In overnight electronic trading, September corn declined 1 3/4 cents to US$3.27 per bushel and December fell 2 3/4 cents to US$3.43. E-CBOT volume in December was 13,459 contracts.

 

Corn was supported to the upside on wheat's recent rally to all-time highs and is expected to come under pressure from sharply lower wheat prices in overnight trade, an analyst said.

 

In overnight trade CBOT December wheat fell 15 1/4 cents to US$8.20 1/4.

 

The FC Stone corn production estimate Wednesday afternoon was a little bearish and there have been some private estimates that were also slightly negative which should add to the expected weak outlook, a floor trader said.

 

FC Stone Wednesday pegged the 2007-08 U.S. corn crop at 13.062 billion bushels with an estimated yield of 152.9 bushels per acre. In August the U.S. Department of Agriculture estimated the U.S. corn crop at 13.054 billion bushels with a yield of 152.8 bushels per acre. The USDA is scheduled to release updated estimates at 8:30 a.m. EDT on Sep. 12.

 

Recent warm and dry weather continues to aid maturing corn in the northern and western sections of the U.S. Midwest, DTN Meteorlogix Weather said.

 

In the western U.S. Midwest scattered showers are expected to end early Friday with dry weather extending from Friday through Saturday, DTN Meteorlogix Weather said. There is a chance for light-to-moderate rain on Sunday. Temperatures are expected to average below normal in this period.

 

In the eastern U.S. Midwest, light-to-moderate showers are expected to develop through eastern and southern areas on Friday and into Saturday, with rainfall potential 0.25-1.00 inches, Meteorlogix Weather said. Temperatures are expected to average above normal Friday and near-to-above normal west and above-normal east on Saturday.

 

In the 6-to-10 day forecast, temperatures are expected to average near-to-below normal and rainfall is forecast to average near-to-below normal, except in the extreme east and northwest where it may possibly be near-to-above-normal.

 

On daily technical charts, December corn closed near the session low Wednesday with price action suggesting that corn prices will remain in a choppy trading range between the August high of US$3.72 and the July low of US$3.24 1/2 for the near-term, a technical analyst said. In addition, any sharp declines in wheat futures will spillover and pressure corn prices, the analyst said.

 

The bulls' next upside price objective is to push prices above solid resistance at this week's high of US$3.57 1/4, with the next downside objective closing prices below last week's low of US$3.38 1/4.

 

First resistance for December corn is seen at US$3.50 and then at US$3.54 1/4. First support is seen at US$3.44 and then at US$3.40.

 

Deliveries posted against the Chicago Board of Trade September corn future were 1,689 contracts. Large issuers included the customer account of Dorman Trading which issued 599 contracts and the customer account of Man Professional Clearing which issued 330 contracts. Large stoppers included the customer account of Man Professional Clearing, which stopped 748 contracts, and the customer account of MF Global, which stopped 178 contracts. The last trade assigned was Sep. 5.

 

In other corn news, Hungary estimates its 2007 corn crop to total 4.2 million metric tonnes, down 49% from last year's bumper crop of 8.2 million tonnes, the state news agency MTI reported Thursday, citing a farm ministry official.

 

Corn futures on China's Dalian Commodities Exchange settled mostly lower with the benchmark May contract down RMB/4 at RMB1,633 per metric tonne.