November 16, 2006

 

CBOT Corn Outlook on Thursday: 1-2 cents higher on firm e-CBOT, export sales

 

 

Chicago Board of Trade corn futures are predicted to begin trading 1-2 cents higher Thursday, following the firm tone overnight and better than expected export sales, sources said.

 

In overnight e-CBOT trading, December corn rose 1 3/4 cents to US$3.60 cents per bushel and March added on 2 1/4 cents to US$3.74 3/4. e-CBOT volume in December was 6,035 contracts.

 

The market was higher overnight as it appears that recent speculative buyers supported their positions after late weakness in Wednesday's day session, a floor analyst said.

 

Weekly corn export sales were above analyst expectations. It looks like the high prices have not yet impacted demand, he added.

 

The U.S. Department of Agriculture reported weekly corn export sales for the 2006-07 marketing year totaled 1.395 million metric tonnes for the week ended Nov. 9, above analyst expectations of 900,000-1.2 million tonnes.

 

The largest buyers were Japan, Mexico and South Korea. Total export commitments are running over 35% above last year.

 

However, market direction remains sensitive to the funds and what they want to do, a floor trader said. If the funds don't support their positions, prices could work their way lower in consolidation after recent strength, he noted.

 

On day session open auction technical charts, corn prices closed slightly higher Wednesday but the bulls are still in strong control of the corn market and are looking for more on the upside in the near term, a technical analyst said. The bulls' next upside price objective is closing prices above resistance at the contract high of US$3.67 per bushel, with the bears near-term price objective closing prices below support at US$3.40.

 

First resistance for December corn is seen at US$3.61 1/2 and then at Wednesday's high of US$3.65 3/4 per bushel. First support is seen at Wednesday's low of US$3.55 1/2 and then at US$3.50.

 

Cash corn basis bids were unchanged to mostly higher Thursday. Peoria, Ill., was up 1 cent at 3 cents over the December future.

 

In other corn news, Israel purchased 80,000 metric tonnes of U.S. corn, sources said.

 

Corn futures on China's Dalian Commodities Exchange settled higher. The May contract rose RMB6 to RMB1,583 a tonne.

 

"Corn prices on the spot market soared this week, particularly in the southern provinces, which was supportive to futures," said Zhang Yifan, a trader at China Grains & Oils Feed Corp.