October 5, 2006

 

CBOT Corn Outlook on Thursday: Mixed opening expected

 

 

Chicago Board of Trade corn futures are forecast to open mixed Thursday after slightly weaker prices overnight, better than expected weekly export sales and a private analytical firm's crop estimate, sources said.

 

In overnight e-CBOT trading, December corn fell 1 1/4 cents to US$2.73 per bushel and March slipped 2 1/4 cents to US$2.85 1/4. e-CBOT volume in December was 9,718 contracts.

 

The market could start at steady levels, a commission house analyst said. Futures were a little lower overnight, consolidating after Wednesday's sharp gains.

 

Informa Economics corn production estimate was a bit above the U.S. Department of Agriculture's September estimate; however, export sales were above expectations so there is a lot to chew on, he said.

 

Informa Economics estimated the 2006 U.S. corn crop at 11.151 billion bushels with a yield of 155.2 bushels per acre, slightly above the 11.114 billion and 154.7 bushels estimated by the USDA in September.

 

USDA repotted weekly corn export sales at 1.158 million metric tonnes for the week ended Sept. 28, above the 800,000-1.0 million tonnes expected by analysts. Mexico, Taiwan and Japan were the largest buyers on the week.

 

The funds are in control and will set the tone after Wednesday's rally, a floor trader said. Outside markets are higher and could lend support, and technically the market looks strong, he added.

 

Commodity trading funds, thought to have sold corn early in Wednesday's session, were buyers in late trade, sources said.

 

Corn will also look to wheat futures for direction, a floor analyst said. The rally in wheat Wednesday helped kick off the rally in corn, so if wheat moves sharply in either direction, it might influence price movement in corn.

 

On technical charts, December pushed above what was solid resistance at Monday's high and the bulls have gained strong upside momentum in December corn and are poised to make a run at the contract high of US$2.87 1/4, a technical analyst said.

 

First resistance for December corn is seen at US$2.76, Wednesday's high and then at US$2.78. First support is seen at US$2.70 and then at US$2.67 1/2.

 

Corn basis bids were mixed Thursday. Central Illinois was unchanged at 5 cents under the December future.

 

In other corn news, India's government will sell 50,000 metric tonnes of corn to poultry farmers from government stocks at subsidized prices to help them recover from a recession caused by an outbreak of bird flu in February.

 

China's corn futures markets remain closed due to a holiday.