September 7, 2006

 

CBOT Corn Outlook on Thursday: 1/2-1 cent lower on absence of fresh inputs

 

 

CBOT Corn futures are expected to begin day session trading 1/2-to-1 cent lower Thursday, following the lower tone in overnight trade and on the absence of fresh inputs ahead of next week's production and supply and demand reports, sources said.

 

In overnight e-CBOT trading, September corn fell 1/4 cent to US$2.26 per bushel and December slipped 1/2 cent to US$2.40 1/4 with e-CBOT December volume of 6,559 contracts.

 

There is not much fresh news to trade on, a floor analyst said. The market was weaker overnight and it looks like it is waiting on next Tuesday's U.S. Department of Agriculture production report to confirm recent private crop estimates which have been viewed as bearish by the trade, he added.

 

The harvest is quickly approaching which should keep prices on the defensive with the increase in supplies adding pressure, he noted.

 

Export sales, normally released on Thursdays, are delayed a day because of the Labor Day holiday and are scheduled for release on Friday.

 

On technical charts, fresh damage has occurred this week to deflate the bulls, with prices expected to trade between the contract low of US$2.33 1/2 and solid technical resistance at US$2.50 the next few weeks, a technical analyst said. First resistance for December corn is seen at US$2.44, Wednesday's high and then at US$2.48. First support is pegged at US$2.40 1/2, Wednesday's low and then at US$2.38 1/4, last week's low.

 

Deliveries posted against September totaled 2,684 contracts. Large issuers included the house account of Shatkin Arbor, which issued 299 contracts, and the customer account of Cunningham Commodities, which issued 368 contracts. Large stoppers included the house account of ADM Investor Services, which stopped 672 contracts and the customer account of Cunningham Commodities, which stopped 372 contracts.

 

In other corn news, China's northeastern province of Jilin plans to auction 515,000 metric tonnes of old-crop corn on Sep. 21-22, the Grains Center under the province's Grains Bureau said Thursday.

 

According to a statement on its web site the Grains Center said that the corn was inedible and would be sold only to ethanol and feed producers.

 

The Korea Feed Association, or KFA, bought 110,000 metric tonnes of U.S. corn from Cargill an association official said Thursday.

 

Corn prices on China's Dalian Commodity Exchange ended mostly higher with the benchmark May 2007 contract up RMB/1 at RMB1,411/tonne.