September 21, 2007

 

CBOT Corn Outlook on Friday: Up 1-2 cents on spillover buying

 

 

Chicago Board of Trade corn futures are predicted to begin trading 1 to 2 cents higher Friday as spillover buying from Thursday's good gains and follow through strength from firm prices in the overnight session are expected to underpin prices at the open analysts said.

 

In overnight electronic trading, December corn rose 2 1/4 cents to US$3.71 1/2 per bushel and March gained 1 3/4 cents to US$3.87. E-CBOT volume in December was 4,169 contracts.

 

Corn should open modestly higher based on follow through from the strong gains seen Thursday when December traded to an 11-week high, a commission house analyst said. Corn could also derive some support from an expected higher start in wheat futures on near-term export demand, the analyst said.

 

Wheat futures are expected to open 6 to 8 cents higher.

 

News Thursday that Informa estimated 2008-09 planted corn acreage below the level planted in 2007 might provide a little support but its too early too focus much on next year's acreage, a trader said.

 

Informa estimated 2008-08 planted corn acreage as 88.2 million acres in 2008-09, down 4.7 million acres from the 92.888 million acres planted in 2007.

 

Given the strong gains seen over the past several days, any move to higher price levels could encourage hedge related selling as harvest activity is increasing as it moves further north in the U.S. Midwest and ahead of the weekend, the trader said.

 

On daily technical charts, December corn hit a fresh 11-week high Thursday as strong weekly U.S. export sales data turned the focus on the bullish demand situation for U.S. corn, a technical analyst said. Market bulls gained solid upside technical momentum and a weekly high close on Friday would be more bullish and considered an upside "breakout" from the summer trading range on the daily bar chart, the analyst said. The next upside price objective is to close prices above solid resistance at Thursday's high of US$3.75, with the next downside price objective closing prices below solid support at US$3.58 3/4 per bushel.

 

First resistance for December corn is seen at US$3.72 and then at US$3.75. First support pegged at US$3.66 and then at US$3.60.

 

In other corn news, China's feed demand is likely to grow by at least 10% next year on larger consumption by hogs as hog supplies increase, the vice chairman of the China Feed Industry Association said Friday.

 

Corn futures on China's Dalian Commodities Exchange settled mostly higher with the May contract up RMB3 at RMB1,659 per metric tonne.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the weekly commitment of traders data for the period ending Sept. 18.