September 8, 2006

 

CBOT Corn Outlook on Friday: Flat-mixed; waiting on USDA report

 

 

CBOT Corn futures are forecast to begin trading Friday little changed with the market looking ahead to Tuesday's U.S. Department of Agriculture production and supply/demand reports, sources said.

 

In overnight e-CBOT trading, September corn fell 1/4 cent to US$2.30 1/2 per bushel and December also slipped 1/4 cent to US$2.45 1/2 with e-CBOT December volume of 2,962 contracts.

 

The market was quiet overnight and it should consolidate as it waits for Tuesday's USDA reports, a commission house analyst said. Trading could be two-sided as participants even up positions, he added.

 

In a Dow Jones Newswire survey of 20 analysts the average 2006-07 corn production estimate was 10.996 billion bushels, slightly higher than the USDA's 10.976 billion estimate in August. The average yield estimate was 152.5 bushels per acre, slightly higher than the 152.2 bushels forecast in August. In a Dow Jones Newswire survey of 14 analysts, the average of 2006-07 corn ending stocks estimate was 1.221 billion bushels, 11 million lower than the 1.232 estimated by the USDA in the August supply and demand report. The average ending stocks estimate of the 2005-06 crop was 2.046 billion bushels, 16 million bushels below the 2.062 forecast by the USDA in August.

 

The USDA is scheduled to release its September crop production report on Tuesday at 7:30 a.m. CDT.

 

The USDA reported 2006-07 corn export sales totaled 913,800 metric tonnes, within the 900,000-1.4 million expected by analysts. A total of 2.454 million metric tonnes in sales were outstanding on Aug. 31 for marketing year 2005-06 and were carried over into the 2006-07 marketing year. The largest buyers were Japan, Taiwan and Mexico.

 

Corn export sales were a little bit of a negative, said a floor trader.

 

On technical charts, corn prices closed higher Thursday and traded a bullish "outside" day on daily bar charts, a technical analyst said. However, the bears still have the near-term technical advantage, he added. First resistance for December corn is pegged at US$2.46 1/4, and then at US$2.48. First support is pegged at US$2.42 1/2, and then at US$2.40.

 

Deliveries posted against September totaled 2,694 contracts. Large issuers included the house account of ADM Investor Services, which issued 672 contracts, and the customer account of Cunningham Commodities, which issued 372 contracts. Large stoppers included the customer account of Cunningham Commodities, which stopped 432 contracts, and the customer account of Dowd Wescott, which stopped 229 contracts. The last trade date assigned was Sep. 7.

 

Cash corn basis bids were unchanged to mostly lower Friday. Central Illinois was 2 cents higher at 10 cents under the December.

 

In other corn news, Ukraine exported 2.5 million metric tonnes of corn during the current corn marketing year Oct. 1-Aug. 31, an increase of 7%, the National Customs Authority said.

 

Corn prices on China's Dalian Commodity Exchange settled mostly higher with the benchmark May 2007 contract up RMB/10 at RMB1,421/tonne.

 

Friday afternoon the Commodity Futures Trading Commission is scheduled to release the Commitment of Traders reports for the period ending Sep. 5.