October 25, 2007

 

CBOT Corn Outlook on Thursday: Up 2-4 cents on weak dollar, strong outside markets

 

 

Chicago Board of Trade corn futures are predicted to start day session trading 2 to 4 cents higher Thursday, helped by a weaker U.S. dollar and supportive outside markets.

 

In overnight electronic trading, December corn rose 4 1/2 cents to US$3.61 a bushel, and March also gained 4 1/2 cents to US$3.78. E-CBOT volume in December was 4,066 contracts.

 

Corn is expected to begin trading higher as it benefits from dollar weakness and spillover from stronger energy and metals markets, a commission house analyst said.

 

There is little in the way of fresh news to move the market; export sales were slightly above expectations and may provide light support, the analyst said.

 

The U.S. Department of Agriculture reported corn export sales for the week ended Oct. 18 totaled 1.546 million metric tonnes, above the 950,000 to 1.4 million tonnes expected but 17% below the previous week's sales.

 

Beyond the strength in outside markets and the weaker dollar, there isn't much to influence market direction, a trader said. Corn has been trading within the same range for some time, and it appears this will continue to be the case Thursday, the trader said. Export sales were strong, but the U.S. crop harvest continues and there isn't much other news to drive the market, the trader said.

 

On daily open auction technical charts, December corn closed lower and at the 20-day moving average crossing at US$3.56 1/2, as prices consolidated some of the rally off October's low, a technical analyst said. Stochastics and the RSI are becoming overbought and turning neutral, indicating a short-term top might be in or is near, the analyst said. If December renews the rally, a 75% retracement level of the September-October decline crossing at US$3.75 3/4 is the next upside target. A close below the 20-day average crossing at US$3.56 1/2 would confirm a short-term top has been posted.

 

First resistance for December corn is seen at US$3.71 and then at the 75% retracement level of US$3.75 3/4. First support is seen at US$3.55 3/4 and then the reaction low crossing of US$3.54.

 

In other corn news, South Korea passed on a tender for 110,000 metric tonnes of corn.

 

Corn production in the Philippines is expected to increase 9% on year to 7.4 million metric tonnes, with farmers expected to plant more to take advantage of higher prices, a senior agriculture official said Thursday.

 

China's corn exports in September were 384,063 metric tonnes in September and totaled 4.5 million tonnes in the January-September period, up 99.8% on year, the country's General Administration of Customs said Thursday.

 

Corn futures on China's Dalian Commodities Exchange settled lower, with the benchmark May contract down RMB7 at RMB1,641/tonne.