November 29, 2007

 

CBOT Corn Outlook on Thursday: 1-2 cents higher on exports, technical momentum

 

 

Chicago Board of Trade corn futures are expected to begin trading 1-to-2 cents higher Thursday, supported by favorable weekly export sales as well as follow through technical momentum from Wednesday's late gains and steady prices in overnight activity, a commission house analyst said.

 

In overnight electronic trading, March corn rose 1 1/2 cents to US$4.06 per bushel E-CBOT volume in March was 4,060 contracts.

 

The market should open higher on follow through from Wednesday's good close and technical momentum after corn couldn't break despite sharp losses in energy futures, the commission house analyst said. Additional support should come from a strong weekly export sales report, with sales near the top end of analysts' estimates.

 

The U.S. Department of Agriculture reported that weekly corn export sales totaled 1.842 million metric tonnes for the week ended Nov. 22, within the 1.0-to-2.0 million tonnes expected by analysts. An expected higher start in wheat might also underpin corn, a trader said. Concerns remain about possible damage to the wheat crop in Argentina and the weather is turning dry in that country, the trader said. CBOT wheat futures are expected to open 4-to-6 cents higher.

 

A rebound in crude oil futures might also provide some support, but a stronger U.S. dollar versus other currencies might temper the gains the trader added.

 

On daily open auction technical charts, March corn futures closed higher Wednesday and traded a bullish "outside day", a technical analyst said. Sharply higher wheat futures provided support though lower energy and metals prices limited the upside.

 

The next upside price objective remains closing prices above solid resistance at US$4.09, this week's high, with the downside objective closing prices below US$3.95. First resistance for March is seen at US$4.05, Wednesday's high and then at US$4.07 1/2. First support is seen at US$4.00 and then at US$3.97 3/4.

 

In other corn news, China will sell at least 2 million metric tonnes of corn from state reserves to stabilize domestic feed meal prices, the China National Grain and Oils Information Center said Thursday.

 

South Africa's 2007-08 final corn production estimate was pegged at 7.125 million metric tonnes, up 3.1% from an estimate in August, the country's Crop Estimates Committee said Thursday.

 

Corn futures on China's Dalian Commodities Exchange settled mostly lower with the benchmark May contract down RMB8 to RMB1,774/tonne.