November 3, 2005

 

CBOT Corn Outlook on Thursday: Higher on overnight trade, export sales

 

 

Corn futures at the Chicago Board of Trade are expected to begin open auction trading slightly higher Thursday, following the tone set in overnight trading, sources said.

 

In overnight e-CBOT trading, December corn rose 1 cent to US$1.97 cents per bushel, March corn gained 3/4 cent to US$2.10 3/4 per bushel, and May corn also advanced 1 cent to US$2.19 per bushel.

 

Thursday morning Informa Economics released its estimate of corn production and yield. Informa pegged corn production at 10.979 billion bushels with a yield of 147.7 bushels per acre. This compares to the 10.857 billion bushels and 146.1 bushels per acre the U.S. Department of Agriculture estimated in October.

 

Traders noted that the numbers were a little negative but in-line with estimates released earlier in the week by FC Stone.

 

"Corn should start out a little higher today," said Vic Lespinasse, of AG Edwards and Sons. The market was a little higher overnight, export sales were good and the Informa numbers were a little negative but near the FC Stone numbers earlier in the week, he added.

 

U.S. Department of Agriculture reported Thursday morning weekly corn export sales totaled 1.218 million metric tonnes, just above the high end of analyst's estimates. USDA noted that sales were a marketing year high and 70% higher than the previous week.

 

Technical analyst Jim Wyckoff said the slow bleed lower continues and the bulls need a dose of fresh bullish fundamental news. He sets first resistance in December corn at US$1.96 3/4, Wednesday's high and then at US$1.98 1/2, this week's high. He pegs first support at US$1.95, and then at US$1.94.

 

Cash corn basis bids are unchanged to mostly higher Thursday morning. Central Illinois is 3 cents higher at even December, while St. Louis is 2 cents higher at 10 cents over December futures.

 

China maintains a bigger grain reserve than is the international norm, but the varieties it stocks may not fully match its domestic market demand, said Zhou Guanhua, an official with the State Grain Administration on Thursday. In addition, "Corn exports in 2006 will depend on many factors," Zhou said. "One is this year's exact output that is yet to be determined. A likely trend in the future is that China may export corn in the North while importing some in the South when it makes sense in terms of prices," he said.

 

Ukraine harvested 5.82 million tonnes of corn to Nov. 2 on 1.38 million hectares, or 80% of the total area to be harvested, the agriculture ministry said Thursday.

 

Corn futures on China's Dalian Commodity Exchange settled unchanged Thursday with the most-active May contract unchanged at RMB1,273/tonne.

 

The Korea Feed Association bought 105,000 metric tonnes of optional origin corn overnight, and Nonghyup Feed also purchased 105,000 tonnes of optional origin corn overnight as well, sources said. KOCOPIA is seeking to purchase 110,000 metric tonnes of optional origin corn, sources said.