December 22, 2005

CBOT Corn Outlook on Thursday: Called 1 cent higher on soy strength

Corn futures at the Chicago Board of Trade are expected to open 1 cent higher on Thursday, underpinned by a steady overnight trade and the gains in soybean futures in electronic trading, sources said. Soybeans are expected to open 6-8 cents higher.

In overnight e-CBOT trading, March corn gained 1 cent to US$2.11 per bushel, May increased 1 1/4 cents to US$2.20 1/4 and July ended up 3/4 cent higher at US$2.28 1/2 per bushel.

The market should open higher on a better technical picture and prices were higher overnight in China, which should support prices at the opening, said Don Roose, president of US Commodities in West Des Moines, Iowa. Stronger soybean prices should also lend support as well but the actions of the funds will be the key to Thursday's trading. Export sales were mostly in line with expectations, he added.

The U.S. Department of Agriculture reported weekly corn export sales of 885,500 metric tonnes, above analysts' estimates of 550,000-750,000 metric tonnes.

Several analysts expect a relatively modest volume session as traders take the opportunity to even up positions on the last full day of trading before the Christmas holiday. Friday's trading session will close at 12:00 noon, CST (1800 GMT).

Scattered precipitation is forecast for Friday across parts of Argentina before mostly dry conditions are predicted for the weekend in much of the country, DTN Meteorlogix weather said. Temperatures are expected to be near normal in the period.

On technical charts, market analysts noted a close above US$2.12 in March futures would provide the bulls with better upside momentum, and a close below US$2.05 would provide the bears with fresh technical momentum. First resistance is pegged at US$2.12, this week's high and then at US$2.13 1/4. First support is seen at US$2.07 3/4, Wednesday's low and then at the weekly low of US$2.06 1/2.

Corn futures settled higher at China's Dalian Commodity Exchange, sources said. The most-active September contract gained RMB7 to RMB1,349/tonne.