December 1, 2005

 

CBOT Corn Outlook on Thursday: Flat-Up 1 cent, following overnight tone

 

 

Corn futures at the Chicago Board of Trade are forecast to begin open auction trading flat to 1 cent higher Thursday, following the price levels established in overnight activity, floor sources said.

 

In overnight e-CBOT trading, December corn rose 1 1/4 cents to USUS$1.88 3/4 per bushel, March gained 1 1/4 cents to USUS$2.03, and May added on 1 cent at USUS$2.11 per bushel.

 

Corn should benefit from short covering after Wednesday's steady tone, a floor trader said. Export sales were below expectations and nothing has changed fundamentally. However, it's the first day of the new month and corn could see some interest from commodity trading funds, he added.

 

Export sales were 611,700 metric tonnes, well below the 800,000-1 million tonnes expected by analysts, 41% lower than the previous week and 47% under the four-week average.

 

The CBOT reported 3,144 deliveries against the December corn contract. Large issuers included the house account of Deutsche Bank Securities which issued 1,158 contracts, the customer account of R.J. O'Brien, which issued 445 contracts, and the customer account of Rosenthal which issued 340 contracts. Large stoppers included the customer account of Man Financial, which stopped 749 contracts, the customer account of the Century Group Division of Man Financial which stopped 415 contracts and the customer account of Citigroup Global Markets, which stopped 443 contracts.

 

On technical charts, analysts peg first resistance for March corn is seen at USUS$2.02 3/4, this week's high and then at USUS$2.05. First support is pegged at the contract low of USUS$2.00 1/4, and then at USUS$2.00.

 

In other corn news, Taiwan's Great Wall Enterprise bought 60,000 metric tonnes of U.S. No. 2 corn from Bunge in a tender concluded Thursday, a Taipei based trader said.

 

Corn prices in China were mostly steady in the week ended Thursday, with trading slow due to concerns over bird flu outbreaks, sources said. As of Thursday, China has reported 25 outbreaks of bird flu across the country since October and has killed millions of fowl. Trading may continue to be sluggish next week if demand continues to be undermined by bird flu concerns, traders said.

 

Corn futures on China's Dalian Commodity Exchange ended at higher levels on light speculative buying with the most active September contract up RMB7/tonne to RMB1,285/tonne.