November 15, 2007

CBOT Corn Outlook on Thursday: Down 2-4 cents on outside markets, firm dollar

Chicago Board of Trade corn futures are expected to begin day time trading 2-to-4 cents lower Thursday as weaker crude oil and metals markets and a firm U.S. dollar are expected to negatively influence corn price direction, analysts said.

In overnight electronic trading, December corn fell 3 cents to US$3.80 per bushel and March declined 4 cents to US$3.96. E-CBOT volume in December was 9,945 contracts. Corn will be influenced by energy and precious metals which are both lower and should weigh on the market, an analyst said. The reversal in the U.S. dollar to stronger levels will also keep buying interest in check as a firm dollar boosts prices of U.S. goods to foreign buyers, the analyst said.

Although corn is expected to open weaker on spillover from other markets, selling interest is not expected to be very large, a trader said. Recent export sales have been better than expected and participants who want to own corn may look at lower prices as an opportunity to buy, the trader said.

The U.S. Department of Agriculture is scheduled to release the weekly export sales report on Friday, with Monday's holiday pushing the release back by a day.

On daily open auction technical charts, March corn futures closed higher and near session highs, helping to keep the uptrend from the October low intact, a technical analyst said. Spillover gains from "outside markets," boosted corn as did good demand news. The next upside price objective is closing prices above solid resistance at last week's high of US$4.07 1/2. The next downside price objective for the bears is to push prices below solid support at US$3.91 1/2, this week's low.

First resistance for March corn is seen at US$4.01 3/4, Wednesday's high and then at US$4.04 3/4. First support is seen at US$3.97 and then at Wednesday's low of US$3.94.

In other corn news, 2007-08 French corn production is estimated at 14.1 million metric tons, up 9% on year, the French government said Thursday.

The Philippines is reviewing the performance of genetically modified Bt corn as a five-year permit to plant the Monsanto's (MON) Bt corn expires this year, the Philippine Department of Agriculture said Thursday.

Corn futures on China's Dalian Commodities Exchange settled mixed with the benchmark May contract down RMB3 to RMB1,777/tonne.