October 19, 2006

 

CBOT Corn Outlook on Thursday: 2-4 cents higher start on overnight gains

 

 

Chicago Board of Trade corn futures are expected to begin trading 2-4 cents higher Thursday, following the strength in the overnight session, sources said.

 

In overnight e-CBOT trading, December corn rose 3 3/4 cents to US$3.19 1/4 cents per bushel and March gained 3 1/2 cents to US$3.28 3/4. e-CBOT volume in December was 8,950 contracts.

 

Corn should see a better start based on the overnight gains and on ideas that the funds will be buyers protecting their positions, a floor source said. Trading could be two-sided however, as export sales came in near the low end of expectations, he added.

 

The U.S. Department of Agriculture reported weekly corn export sales for the week ended Oct. 12 were 820,200 metric tonnes, versus analysts' expectations of sales between 800,000-1.0 million metric tonnes. Sales were 36% below last week's level. Japan, Syria and Mexico were the largest buyers on the week.

 

The corn market could give back any opening level gains without continued support from the funds as there is little fresh news to support a higher market, a commission house analyst added.

 

On technical charts, December corn pulled back on profit taking though no major chart damage occurred, a technical analyst said. The bulls' next upside price objective remains closing prices above US$3.25, with the bears' objective is closing prices below US$3.00 per bushel, he said. First resistance for December corn is seen at US$3.18 1/2 and then at US$3.20. First support is pegged at US$3.13 1/2 and then at US$3.09 1/2.

 

Corn basis bids were unchanged to higher Thursday. Central, Illinois was unchanged at 6 cents over the December future.

 

In other corn news, the Korea Corn Processing Association of Kocopia, bought 55,000 metric tonnes of optional-origin corn from Cargill in a tender concluded Tuesday, an association official said.

 

Taiwan Sugar Corp., or TSC, bought 35,000 metric tonnes of U.S. origin corn from Marubeni in a tender concluded Thursday, a Taipei-based trader said.

 

South Korea's Member Feed Group bought 107,500 metric tonnes of Chinese corn and South Korea's Nonghyup Feed Group bought 157,500 metric tonnes of Chinese corn, sources said.

 

Corn futures at China's Dalian Commodities Exchange ended mostly lower, with the May contract down RMB/2 to RMB 1,466/tonne.