September 21, 2006

 

CBOT Corn Outlook on Thursday: Steady to slightly higher start seen

 

 

CBOT corn futures are predicted to begin day session trading steady to slightly higher Thursday with corn supported by firm weekly exports and forecasts for rain in the near term which is expected to slow down early harvesting of the U.S. crop, sources said.

 

In overnight e-CBOT trading, December corn ended unchanged at US$2.49 cents per bushel and March also finished flat at US$2.62 1/4. Volume overnight in December was 3,595 contracts.

 

Corn could see some support from the export sales which were a little bit better than expected and the rain forecast for the corn belt which could delay early harvesting efforts, a commission house analyst said. However, trading could remain choppy as the market continues to try and work through strong technical resistance at US$2.50 in December futures, he added.

 

Weekly corn export sales totaled 1,029.8 million metric tonnes, above the 700,000-900,000 tonnes expected by analysts.

 

The major buyers included Mexico at over 410,000 metric tonnes and Egypt at 169,100 tonnes.

 

Export sales continue to support corn, said John Kleist with Top Third Ag Marketing. When December was trading in the US$2.30-US$2.40 price range commercial pricing helped support the market and now corn is seeing good coverage from importers, he added.

 

Scattered showers and thunderstorms with amounts of .50-2.00 inches will continue from Thursday through Saturday in the western U.S. Midwest, DTN Meteorologix Weather said. Showers are possible in parts of the eastern section of the U.S. Midwest Friday and scattered showers and thunderstorms are expected Saturday and Sunday with rainfall amounts of .50-1.50 inches expected.

 

Temperatures will average near-to-below Friday and below normal west and near to above normal east on Saturday, DTN Meteorologix Weather said.

 

On technical charts, December corn closed at its highest closing level in six weeks on short covering in a bear market, a technical analyst said. Market bulls have some technical momentum to begin to suggest a near-term low is in place, he added. The next upside price objective is closing prices above solid resistance at US$2.50 in December. First resistance is seen at US$2.49 1/2, Wednesday's high and then at US$2.50. First support is pegged at US$2.46 1/2, and then at US$2.44.

 

Cash corn basis bids were unchanged to mostly higher Thursday morning, with Central Illinois unchanged at 2 cents under the December future.

 

In other corn news, South Korea's Korea Corn Processing Industry Association, or Kocopia declined all offers at a tender to buy up to 110,000 metric tonnes of optional origin corn Thursday, sources said.

 

Corn futures on China's Dalian Commodity Exchange ended mostly lower with the May contract down RMB/6 at RMB1,399/tonne.