September 13, 2007

 

CBOT Corn Outlook on Thursday: Down 1-2 cents; consolidating after recent rally

 

 

Chicago Board of Trade corn futures are predicted to start day session trading 1-to-2 cents lower Thursday, consolidating after Wednesday's strong rally to three-week highs and mixed prices in overnight trading, analysts said.

 

In overnight electronic trading, September corn gained 1/4 cent to US$3.40 per bushel, December fell 1 1/2 cents to US$3.55 and March also slipped 1 1/2 cents to US$3.71 1/4. E-CBOT volume in December was 6,443 contracts.

 

Corn could see some consolidation after the gains set on Wednesday, but a lot depends on what happens in wheat and soybeans, an analyst said. Although corn followed soybeans higher Wednesday, a sharp break in wheat could press corn prices, the analyst said.

 

Trading should be two-sided and choppy, a commission house analyst said. There could be some profit taking as traders lock in some gains. Weekly export sales for corn were within expectations, however wheat export sales were well above analysts' expectations and could limit downward momentum and any move lower should be well supported, the analyst said.

 

The U.S. Department of Agriculture reported weekly U.S. corn export sales were 1.040 million metric tonnes for the week ended Sep. 6, within the range of analysts' expectations. A total of 2.672 million metric tonnes in sales were outstanding at the end of the marketing year and were carried over into the 2007-08 marketing year.

 

On daily technical charts, December corn closed nearer the session high and hit a fresh three-week high despite a bearish crop production estimate and sharp losses in wheat futures as heavy short covering was featured, a technical analyst said. The bulls' next upside price objective is closing prices above solid resistance at US$3.60, with the bears' next downside price objective closing prices below solid support at US$3.50.

 

First resistance for December corn is seen at US$3.58 3/4, Wednesday's high and then at US$3.60. First support is seen at US$3.55 and then at US$3.52 1/2.

 

Deliveries posted against the Chicago Board of Trade September corn future were 1,571 contracts Thursday. Large issuers included the customer account of Man Professional Clearing which issued 508 contracts and the customer account of MF Global which issued 403 contracts. Large stoppers included the customer account of Man Professional Clearing which stopped 347 contracts, the customer account of MF Global which stopped 364 contracts, and the customer account of Cunningham which stopped 169 contracts. The last trade assigned was Sep. 12.

 

In other corn news, private analytical firm Strategie Grains forecast 2007-08 corn imports into the E.U. at 10 million metric tonnes, up 3.3 million tonnes on the year. The E.U.'s zero tolerance policy on non-approved genetically modified products means corn imports from the U.S. and Argentina won't be possible, leaving Brazil as the only major source.

 

Corn futures on China's Dalian Commodities Exchange settled higher on spillover from sharp gains in Chinese soybean futures, analysts said. The May contract settled RMB/10 higher at RMB1,681 per metric tonne.