September 14, 2007

 

CBOT Corn Outlook on Friday: 1-2 cents higher, following overnight trend

 

 

Chicago Board of Trade corn futures are expected to start day session trading 1 to 2 cents higher Friday, supported by a steady tone in overnight activity and possible position squaring ahead of the weekend, analysts said.

 

In overnight electronic trading, September corn gained 3/4 cent to US$3.31 1/2 per bushel, December also increased 3/4 cent to US$3.47 1/2 and March rose 1 3/4 cents to US$3.65 1/2. e-CBOT volume in December was 2,553 contracts.

 

Corn should start out higher based on the steady tone in overnight electronic trading but could also see some weakness as weather in much of the U.S. Midwest should allow active harvest activity, a commission house analyst said.

 

Price direction may depend on what happens in wheat futures, a trader said. Wheat was lower Thursday and had moderate declines in overnight trade and if wheat sees further liquidation, it could pressure corn, the trader said.

 

It has been a volatile week and some participants may chose to even up their positions ahead of the weekend, another analyst said.

 

Unseasonably cold weather is expected over the next few days in parts of the U.S. Midwest with some frost and freeze conditions in the north on Saturday morning, DTN Meteorlogix Weather said. Due to the maturity of corn and soybean crops no major damage is expected to occur.

 

In the western U.S. Midwest, mostly dry conditions are expected through Monday with temperatures below to much-below normal during the next two days, Meteorlogix Weather said.

 

In the eastern U.S. Midwest, dry conditions are expected from Saturday into the middle of next week. Temperatures will be below-to-much below normal with some scattered frost and light freeze conditions in the north over the weekend.

 

On daily technical charts, December corn closed nearer the session low following the big sell-off in wheat futures, a technical analyst said. This week's price action still suggests corn prices will remain between the recent range of US$3.72 and US$3.24 1/2 for at least the near-term, the analyst said. Corn bulls' next upside price objective is to close prices above solid resistance at US$3.55, with the bears' downside objective closing prices below support at US$3.40.

 

First resistance for December corn is seen at US$3.50 and then at US$3.55. First support pegged at Thursday's low of US$3.43 3/4 and then at US$3.40.

 

Deliveries posted against the Chicago Board of Trade September corn future were 1,271 contracts Friday. Large issuers included the customer account of Man Professional Clearing which issued 347 contracts and the customer account of MF Global which issued 364 contracts. Large stoppers included the customer account of the Astro division of UBS, which stopped 387 contracts, the customer account of RJ O'Brien which stopped 245 contracts, and the customer account of MF Global which stopped 190 contracts. The last trade assigned was Sept. 13.

 

In other corn news, China is unlikely to issue new corn export quotas this year due to concern over higher corn prices, a Chinese corn exporter said, Friday.

 

Philippine corn production between July and September will likely reach 2.50 million metric tonnes, up 13% from a year earlier despite poor rains, a senior agriculture official said Friday. However, the forecast is 200,000 tonnes lower than the department's original production target of 2.7 million tonnes.

 

India's May 1-Sept. 14 Corn sowing is at 7.71 million hectares versus 7.17 in the same time last year, the government reported Friday.

 

Corn futures on China's Dalian Commodities Exchange settled slightly lower Friday. The May contract settled down RMB13 at RMB1,668 per metric tonne.