October 27, 2005

 

CBOT Corn Outlook on Thursday: Steady-Easier; poor exports, overnight trend

 

 

Corn futures at the Chicago Board of Trade are expected to start Thursday's pit session steady to slightly easier, following the tone set overnight and on weaker than expected weekly export sales, sources said.

 

In overnight e-CBOT trading, December corn fell 1/4 cent to US$1.98 per bushel, March corn slipped 1/4 cent to US$2.11 1/2 per bushel, and May corn ended unchanged at US$2.20 1/2 per bushel.

 

There's no fresh bullish news, a floor trader said. Corn export sales were weak, the market finished at its contract low overnight and the harvest weather is favorable for the next several days, he added.

 

The U.S. Department of Agriculture reported weekly corn export sales at 718,400 metric tonnes for the week ended Oct. 20. This was under analysts expectations of 1-1.15 million metric tonnes and 26% below the prior week.

 

Mostly dry weather conducive to harvesting is forecast for much of the U.S. Midwest through Saturday, DTN Meteorlogix weather said.

 

The market will also closely monitor any additional news about the spread of Asian bird flu and its potential impact on feed demand, sources said.

 

"Bulls need another dose of fresh fundamental news," said technical analyst Jim Wyckoff. He pegs first resistance for December corn at US$2.00 and then at US$2.01 1/2, this week's high. He sets first support at US$1.98, the contract low, and then at US$1.97.

 

The International Grains Council raised its estimate of world corn production by 6 million metric tonnes to 671.8 million metric tonnes from 665.8 million metric tonnes estimated in September.

 

Preliminary corn futures open interest set another record Wednesday. The CBOT reported preliminary open interest jumped 23,644 contracts to 850,517 contracts.

 

Corn basis bids were mixed Thursday morning. Central Ill. was unchanged at 10 cents under December, while St. Louis was unchanged at 6 cents over December.

 

In other corn news, China is expected to import nearly 25 million metric tonnes of corn by the year 2020, said an official at China's Institute of market Economy of the Development Research Center under the State Council.

 

The Korea Feed Association bought 55,000 metric tonnes of U.S. No. 3 yellow corn from Cargill, a Korea-based trader said Thursday.

 

Corn futures on China's Dalian Commodity Exchange settled mostly higher Thursday with the most-active January contract up RMB2/tonne to RMB1,230/tonne.