November 2, 2006

 

CBOT Corn Outlook on Thursday: Higher on e-CBOT, crop estimates

 

 

Chicago Board of Trade corn futures are forecast to begin Thursday's session 4-to-5 cents higher as follow through buying from overnight activity and supportive private crop estimates are expected to supply strength to the market, sources said.

 

In overnight e-CBOT trading, December corn gained 5 cents to US$3.38 1/2 cents per bushel and March rose 5 1/4 cents to US$3.52 1/4. e-CBOT volume in December was 11,812 contracts.

 

Corn should start higher on follow through from the overnight gains and the supportive private crop production estimates, a floor analyst said.

 

Wednesday afternoon, private analytical firm FC Stone estimated the U.S. corn crop at 10.808 billion bushels with a yield of 152.1 bushels per acre.

 

Sources said that Informa Economics released its estimate of the U.S. corn crop Thursday morning. Informa estimated the crop at 10.729 billion bushes with a yield of 151.0 bushels per acre.

 

These estimates compare to the U.S. Department of Agriculture's October production forecast of a 10.905 billion bushel crop with a yield of 153.5 bushels per acre.

 

The USDA is scheduled to release an updated forecast of production and yields on Nov. 9.

 

The market could see some support from speculative buying and the beginning of the index funds rolling out of the nearby December and into March, a commission house analyst said.

 

The USDA reported that weekly corn export sales were 1.027 million metric tonnes for the week ended Oct. 26, within the 900,000-1.1 million tonnes expected by analysts. Japan was the largest buyer on the week, followed by sales to unknown destinations and Columbia.

 

On day session open auction technical charts, prices closed near the session high as the first of the month prompted strong fund buying interest, a market technician said. First resistance for December corn is seen at the contract high of US$3.34 and then at US$3.35 1/4. First support is seen at US$3.30, and then at US$3.27 1/2.

 

In other corn news, the USDA reported sales of 132,000 metric tonnes of corn had been sold to unknown destinations for delivery in the 2006-07 crop year.

 

Corn futures at China's Dalian Commodities Exchange settled higher after the overnight strength in CBOT futures, sources said. The May contract rose RMB/17 to RMB 1,488/tonne.