CBOT CORN OUTLOOK: Futures Expected To Climb On Good US Exports

CHICAGO (Dow Jones)--U.S. corn futures are expected to open higher Thursday as the U.S. government reported solid export sales amid low domestic supplies.

Traders predict corn for March delivery will open six cents to eight cents a bushel higher at the Chicago Board of Trade. In overnight electronic trading, the contract rose 8 1/2 cents, or 1.2%, to $6.99.

Corn futures after touching fresh 31-month highs at the start of the week experienced a slight selloff as traders took profits. Yet analysts expect buying to pick up as broad concerns remain about end-of-season U.S. corn supplies, which are projected to fall to a 15-year low.

The U.S. Department of Agriculture Thursday reported export sales of 1.03 million metric tons for the week ending Feb 10. The sales, which were for the current crop-year corn, fell 7% from the previous week, but were 15% above the four-week average. The report was on the higher end of analysts' expectations.

"The trend is very positive for corn sales," said Tim Hannagan, Chicago-based senior grains analyst at brokerage PFG Best, who sees weekly exports above one million metric tons as supportive for prices.

Hannagan said the exports included less-prominent buyers of U.S. corn, which means the sales could be temporary in nature. Mexico bought 640,600 metric tons of corn for the current crop year as it secured supplies after a freeze earlier this month wiped out an estimated 17.5% of that country's crop.

China wasn't listed as a buyer last week, yet analysts predict the country will eventually turn to the U.S. for supplies. The question remains though for how much, as global supplies remain tight.

"China is likely to be a wild card this year with continued signals that its plan for grains self-sufficiency will prove to be an arduous task," analysts at Barclays Capital wrote in a research report Thursday.

(Source: http://online.wsj.com)