November 23, 2007

CBOT Corn Outlook on Friday: Up 1-3 cents on steady e-CBOT, strong exports

Chicago Board of Trade corn futures are predicted to begin day session activity 1 to 3 cents higher Friday following a steady tone in overnight trading and stronger-than-expected weekly export sales, analysts said.

In overnight electronic trading, December corn gained 1 1/4 cents to US$3.83 1/4 per bushel and March also gained 1 1/4 cents to US$4.00. E-CBOT volume in March was 5,568 contracts.

Corn futures were modestly higher overnight and the weekly export sales were stronger than expected and should provide a boost for prices, a commission house analyst said. Soybeans were also strong in the overnight session and may also provide some spillover strength to corn at the opening, the analyst said.

The U.S. Department of Agriculture reported that weekly corn export sales were 1.847 million metric tonnes for the week ended Nov. 15, above the 1.0 million to 1.550 million metric tonnes expected by analysts. Included in the total were sales of 1,500 tonnes for delivery in the 2008-09 marketing year. Sales were 35% above the previous week with Egypt the largest buyer on the week.

Export sales were stronger than expected, but the upside might be limited, a trader said. Crude oil is weaker by almost a dollar, and some participants are extending their holiday with the trading session closing early, the trader noted. The CBOT will close at 1 p.m. EST.

On daily open auction technical charts, March corn futures closed firm Wednesday, but were unable to draw much support from the limit-up gains seen in wheat and higher gold prices, a market technician said. The next upside objective for market bulls remains closing prices above major resistance at US$4.00 per bushel. The next downside price objective for the bears remains pushing prices below last week's low of US$3.91 1/2.

First resistance for March corn is seen at US$4.00 and then at US$4.03. First support is seen at US$3.95, Tuesday's low and then at US$3.93 1/2.

In other corn news, corn prices in China are likely to remain stable at current levels after the ongoing harvest ends, the State Grain Administration said Friday. The country's corn production will be higher than last year while consumption will grow steadily, the administration said on its Web site. China estimates its corn production at 148 million metric tonnes in 2007, up from 145 million tonnes last year, according to an estimate earlier this month from China's National Grain and Oils Information Center.

Corn futures on China's Dalian Commodities Exchange settled higher, with the benchmark May contract up RMB22 to RMB1,787/tonne.