December 7, 2006

 

CBOT Corn Outlook on Thursday: Steady start after Wednesday's declines

 

 

Chicago Board of Trade corn futures are expected to begin day session trading steady Thursday, following the tone established in overnight trading and consolidating after losses set in Wednesday's session, sources said.

 

In overnight e-CBOT trading, December corn slipped 1/4 cent to US$3.52 3/4 per bushel and March also ended down 1/4 cent at US$3.65 3/4. e-CBOT volume in March was 9,613 contracts.

 

Corn was little changed in the overnight trade and should consolidate after Wednesday's losses, a commission house analyst said. There was little fresh news out overnight and export sales were on the low end of analysts' estimates which might also temper buying interest, he added.

 

The U.S. Department of Agriculture reported weekly corn export sales were 812,700 metric tonnes for the week ended Nov. 30, near the bottom end of the 800,000-1.0 million metric tonnes expected by analysts. Major buyers on the week included Japan, South Korea and Mexico.

 

December is a tough month to trade, a floor analyst said. It is the end of the year and participants are closing down their operations and unwilling to enter into new positions. Corn looks like it will follow the other markets, he added.

 

On day session open auction technical charts, no serious chart damage has occurred but this could be the early stages of a downside price correction, a market technician said. The bull's next upside price objective is closing prices in March above US$3.80 per bushel. The bears' near-term price objective is closing prices below support at US$3.60, the technician said.

 

First resistance for March corn is seen at US$3.70 and then at US$3.73 1/2, Wednesday's high. First support is seen at US$3.65 and then at US$3.60.

 

Deliveries posted against the December contract totaled 1,345 contracts Thursday. Large issuers included the customer account of Bank of America, which issued 800 contracts and the customer account of FC Stone, which issued 200 contracts. Large stoppers included the customer account of Morgan Stanley, which stopped 383 contracts, the customer account of Iowa Grain, which stopped 306 contracts and the customer account of JP Morgan, which stopped 143 contracts. Preliminary open interest in December is 14,965 contracts. The last trade assigned was Nov. 30.

 

Corn basis bids were unchanged to mostly higher Thursday morning. Peoria, Illinois was up 1 cent at 2 cents under the December future.

 

In other corn news, South Korea's Korea Feed Association bought 220,000 metric tonnes of U.S. corn for delivery in the 2006-07 marketing year, a trader in Seoul said Thursday.

 

Taiwan's Members Feed Industry Group, of MFIG is seeking 40,000-60,000 metric tonnes of U.S. corn in a tender to be concluded Friday, a Taipei-based trader said.

 

Corn futures on China's Dalian Commodities Exchange ended mostly lower with the benchmark May contract down RMB/12 at RMB 1,555/tonne.