November 4, 2005

 

CBOT Corn Outlook on Friday: Flat, higher, searching for direction

 

 

Corn futures at the Chicago Board of Trade are expected to start pit trading flat to one cent higher Friday, with the market searching for fresh inputs and looking to other markets for direction, sources said.

 

In overnight e-CBOT trading, December corn gained 1/4 cent to US$1.96 1/2 per bushel, March corn rose 1/4 cent to US$2.10 3/4 per bushel, while May corn slipped 1/2 cent to US$2.18 per bushel.

 

Fresh fundamental news remains scarce, so corn will continue to chop around, searching for direction while farmers clean up the rest of the crop in the fields, a floor analyst said.

 

In Thursday's activity, corn was supported by stronger soy complex futures as technical and fund buying pushed soybeans, soy meal and soy oil sharply higher.

 

A floor trader noted that index funds may roll out of their December positions into March and the market could begin to see some position evening ahead of next Thursday's U.S. Department of Agriculture crop production and supply/demand reports.

 

Scattered precipitation is forecast in parts of the U.S. Midwest for the weekend with drier weather to follow in most areas of the region, DTN Meteorlogix weather said.

 

Technical analyst Jim Wyckoff sets first resistance in December corn at US$1.97 1/2, Thursday's high and then at US$1.98 1/2, this week's high. He pegs first support at US$1.95 3/4, and then at US$1.95.

 

Cash corn basis bids were mixed Friday morning. Central Illinois was unchanged at even December futures, while St. Louis was unchanged at 10 cents over December futures.

 

In other corn news, Hungary's corn harvest is 50% complete at 4.5 million metric tonnes with the amount expected to total 8.5 million metric tonnes, above last year's 8.3 million metric tonne crop, the Agriculture Ministry state secretary said Friday.

 

The South Korean Corn Processing Industry Association, KOCOPIA, bought up to 110,000 metric tonnes of optional origin corn from Cargill in a tender concluded Friday, a South Korean trader said.

 

Argentine farmers had planted 59.3% of the 2005-06 corn crop through Saturday, according to the Buenos Aires Exchange. The exchange estimates 2005-06 corn production at 17.5 million metric tonnes, down from 19.5 million produced last year, while the USDA sees Argentina's corn production in 2005-06 at 18 million metric tonnes.

 

Feed wheat imports to Korea are expected to replace some corn imports in the 205-06 marketing year, according to a USDA attach¨¦ report posted on the Foreign Agricultural Service website.

 

The Commodity Credit Corporation announced a sale of 24,000 metric tonnes of corn to Honduras, with ADM as the seller.

 

Corn futures traded on the Dalian Futures Exchange settled mostly higher with the most active May contract up RMB2/tonne to RMB1,275/tonne.