September 14, 2006

CBOT Corn Outlook on Thursday: 1-2 cents higher, following overnight theme

CBOT corn futures are expected to start day session trading 1 to 2 cents higher Thursday, following the tone established in overnight trade with support from higher outside markets and firm cash prices also providing support, sources said.

In overnight e-CBOT trading, December corn rose 2 cents to US$2.39 3/4 per bushel and March also gained 2 cents to US$2.54 1/4. e-CBOT volume overnight in December was 2,511 contracts.

Corn should start out higher based on the tone set in the overnight session, a floor analyst said. The cash market remains firm, outside markets are higher and the market is consolidating after the reports out earlier in the week he added. Weekly corn export sales were below expectations and could act as a drag on prices, he noted.

The U.S. Department of Agriculture reported that weekly corn export sales were 669,900 metric tonnes for the week ended Sept. 7, below the 850,000 to 1.0 million metric tonnes expected. Taiwan and South Korea were among the largest buyers.

On technical charts, CBOT December corn hit another fresh three-week low Wednesday, a technical analyst said. He sees first resistance for December corn at US$2.41 and then at US$2.44 1/2. First support is pegged at US$2.37 and then at US$2.36.

Deliveries posted against September totaled 1,645 contracts. Large issuers included the house account of Shatkin, which issued 339 contracts, and the customer account of Shatkin, which issued 309 contracts. Large stoppers included the customer account of ABN Amro, which stopped 512 contracts, the house account of Tenco, which stopped 502 contracts and the customer account of RJ O'Brien, which stopped 418 contracts. The last trade date assigned was Sept. 13.

In other corn news, South Korea's Korea Corn Processing Industry Association, or Kocopia, bought up to 110,000 metric tonnes of optional origin corn from Cargill in a tender concluded Tuesday, an association official said Thursday.

Corn futures on China's Dalian Commodity Exchange settled mostly higher with the May contract up RMB/10 at RMB1,413/tonne.