December 6, 2007

 

CBOT Corn Outlook on Thursday: 2-3 cents lower on outside market weakness

 

 

Chicago Board of Trade corn futures are predicted to start day time trading 2 to 3 cents lower Thursday as weaker prices in energy and precious metals are expected to weigh on prices, analysts said.

 

In overnight electronic trading, March corn fell 2 3/4 cents to US$4.08 1/2 per bushel. E-CBOT volume in March was 6,252 contracts.

 

Crude oil and precious metals prices were weaker in overnight trade and continue to trade lower, which should keep corn on the defensive, an analyst said. In addition, the dollar was stronger, which is also a negative for grain prices and might add to the weak tone, the analyst said.

 

Weekly U.S. corn export sales were slightly below analyst estimates and well below the level sold last week and might limit buying interest, a commission house analyst said.

 

The U.S. Department of Agriculture reported that corn weekly export sales were 1.059 million metric tonnes, below the 1.1 million to 1.5 million tonnes expected and 43% lower than the previous week.

 

Lower than expected grain production estimates from Stats Canada could act to limit selling interest, the commission house analyst said.

 

A drier than normal weather pattern continues in Argentina, DTN Meteorlogix Weather said. The next chance for rain is on Saturday favoring northern areas with another chance for rain expected Sunday night into Monday also favoring northern growing areas. Temperatures are expected to average below normal.

 

On daily open auction technical charts, March corn futures closed steady and nearer the session high. Market bulls continue to have a solid near-term technical advantage, a market technician said. The next upside objective is to push and close prices above solid technical resistance at US$4.23 per bushel with the next downside objective is to push prices below support at US$4.00.

 

First resistance for March is seen at US$4.13 3/4, this week's high and then at US$4.17. First support is seen at Wednesday's low of US$4.08 1/4 and then at US$4.05.

 

Deliveries posted against the Chicago Board of Trade December future were 2,617 contracts Thursday. Large issuers included the customer account of Man Professional Clearing which issued 457 contracts, the customer account of Cunningham Commodities, which issued 689 contracts and the customer account of MF Global, which issued 344 contracts. Large stoppers included the customer account of Man Professional Clearing, which stopped 955 contracts, and the customer account of Cunningham Commodities, which stopped 304 contracts. The last trade assigned was Dec. 5.

 

In other corn news, South Africa has approved a draft of its biofuels industry strategy and it does not include corn as part of the strategy, senior government officials said Thursday. An official with the Department of Minerals and Energy said the government feared the use of corn could threaten food security.

 

Corn futures on China's Dalian Commodities Exchange settled lower with the benchmark May contract down RMB15 to RMB1,746/tonne.