December 14, 2006

 

CBOT Corn Outlook on Thursday: Narrowly mixed, export sales supportive

 

 

Chicago Board of Trade corn futures are expected to begin trading narrowly mixed Thursday as strong export sales are expected to provide support for futures at the open, floor sources said.

 

In overnight e-CBOT trading, December corn slipped 2 1/4 cents to US$3.52 1/4 per bushel and March fell 3/4 cent to US$3.67 1/2. E-CBOT volume in March was 5,358 contracts.

 

Weekly export sales were above expectations, but the market should trade steady to start and see what develops, though the market was weaker in e-CBOT activity and could impact the upside, a floor analyst said. Trading might be choppy and could see either side of Wednesday's settlements, as participants continue to reduce their trading ahead of the holidays, he added.

 

The U.S. Department of Agriculture reported weekly corn export sales totaled 1.51 million metric tonnes for the week ended Dec. 7; slightly above the 700,000-1.5 million expected by analysts.

 

South Korea, Mexico and Japan were the largest buyers on the week.

 

Corn is also waiting for Informa's 2007-08 acreage estimates, expected to be released either later Thursday or Friday, for fresh information on what next year's expected plantings could be, a floor source said.

 

On day session open auction technical charts, the bulls still have the near-term technical advantage, but have lost momentum, a technical analyst said. Their near-term objective remains closing prices above US$3.80 per bushel, while the bears' downside objective is closing prices below support at US$3.63 1/2, the analyst said.

 

First resistance for March corn is seen at US$3.71, Wednesday's high, and then at US$3.76, this week's high. First support is seen at Wednesday's low of US$3.65 1/2 and then at US$3.63 1/2.

 

Deliveries posted against the December contract totaled 817 contracts Thursday. Large issuers included the customer account of Henning-Carey, which issued 601 contracts and the customer account of Shatkin-Arbor, which issued 70 contracts. Large stoppers included the customer account of the USA Blue division of Man Financial, which stopped 378 contracts, the house account of ADM Investor Services, which stopped 128 contracts and the customer account of the LBS division of Man Financial, which stopped 147 contracts. Preliminary open interest in December is 1,664 contracts. The last trade assigned was Dec. 12. December futures expire Thursday.

 

In other corn news, private analytical firm Strategie Grains forecast EU-25 2007-08 corn output up 6% at 46.6 million metric tonnes, with an 8% gain in yield to 8.2 metric tonnes per hectare. The area planted is expected to decline 2% to 5.7 million hectares.

 

Corn futures on China's Dalian Commodities Exchange finished modestly lower with the most active September contract down RMB/4 to RMB 1,696/tonne.