January 1, 2006

  

CBOT Corn Outlook on Tuesday: Higher on outside markets, e-CBOT

 

 

Corn futures at the Chicago Board of Trade are forecast to begin trading 1-2 cents higher to start off 2006 as firm prices overnight, higher soybean values traded in the overnight session and stronger outside markets are expected to help underpin corn at the opening, sources said.

 

In overnight e-CBOT trading, March corn gained 2 cents to US$2.17 3/4 per bushel, May corn rose 1 3/4 cents to US$2.26 3/4, and July corn added on 2 1/2 cents to US$2.34 1/2 per bushel.

 

Corn should follow other markets Tuesday, a floor analyst said. Outside markets are all higher Tuesday morning, soybean futures were sharply higher overnight and the weather in Argentina is a little dry and could use more rain, he added.

 

In addition, funds are expected to renew their recent buying interest with ideas that index fund money will be entering the market as well, the analyst said.

 

Follow through buying from last week may also provide support. On Friday, corn staged a late session rally, pushing through technical resistance and recovering to levels set earlier in the week in very active trading near the close.

 

Dry weather interspersed with lightly scattered showers are forecast over the next several days in Argentina with temperatures normal to above normal, DTN Meteorlogix weather said.

 

An outside day with a higher close on the daily charts Friday has set up a bullish technical formation in March corn, a technical analyst said. March now faces key technical resistance at US$2.17, the high set on Dec. 28 and Dec 30. Resistance is also seen at US$2.20 1/4, with downward support at US$2.13 1/4 and then at US$2.10.

 

Large non-commercial traders were net long 27,114 corn futures contracts and a combined 5,862 corn futures and options on futures as of Dec. 27 the Commodity Futures Trading Commission reported Friday.

 

In other agricultural news, Argentina sold 13.47 million metric tonnes of 2004-05 corn for export through Dec. 30 as compared to 10.2 million metric tonnes the same time last year, the Agriculture Secretariat reported Monday.

 

South Korea's Nonghyup Feed Group Inc., or NOFI, purchased 24,000 metric tonnes of feed corn in a tender concluded late Friday, a Seoul-based trader said. NOFI purchased 24,000 tonnes of China origin feed corn from trading house Daewoo International for March 20-April 5 delivery.

 

South Africa's 2004 corn crop was revised to 11.7 million metric tonnes from 12.4 million after disappointing deliveries, the U.S. Department of Agriculture's agricultural attache reported late last week. In addition, a substantial cutback in area planted is expected for the 2005 planting season due to the weather and market factors. This has trimmed oversupply perceptions and helped support domestic prices. The crop remains dependent on weather conditions, but could reach 7.3 million tonnes, accoridng to the Foreign Agricultural Service

 

China's Dalian Futures Exchange was closed Tuesday in observance of the New Year's Day holiday.

 

Tuesday morning, the USDA will release the weekly export inspections report for the week ending Dec. 29 at 10:00 a.m. CST.