January 7, 2008

 

CBOT Corn Outlook on Monday: Steady start with fresh news lacking

 

 

Chicago Board of Trade corn futures are predicted to begin day session trading steady Monday, with the absence of fresh news expected to limit price volatility at the open, analysts said.

 

In overnight electronic trading, March corn slipped 3/4 cent lower to US$4.66 per bushel.

 

Friday's U.S. Department of Agriculture reports are expected to reveal slightly lower ending stocks data which should be supportive to prices, a commission house analyst said. However, corn could see choppy trade as it is due for a correction after its recent rally to new contract highs, the analyst added.

 

Although corn is due for a correction, participants will not be aggressive sellers, an analyst said. Commodity index funds are expected to be rebalancing their portfolios, adding additional corn to their indices while reducing their exposure to other commodities which should benefit corn. However, rain is forecast for Argentina for later this week which could dampen buying enthusiasm, the analyst said.

 

Dry conditions with only a few light showers are expected through Wednesday in Argentina, DTN Meteorlogix Weather said. Scattered showers and thunderstorms with amounts of 0.50-1.50 inches with locally heavier amounts are possible on Thursday. Temperatures are forecast above to much above normal through Wednesday before turning cooler Thursday, Meteorlogix Weather said.

 

On daily technical charts, March corn closed at another fresh contract high close and 12-year high close as the three-month old-uptrend remains in place on the daily bar chart, a technical analyst said. The next upside price objective continues to be closing prices above major psychological resistance at US$5.00 per bushel. The next downside objective is to push prices below solid support at US$4.50.

 

First resistance for March corn is seen at US$4.69 1/2, the contract high and then at US$4.75. First support is seen at Friday's low of US$4.59, and then at US$4.56 3/4, which is the bottom of this week's upside price gap on the daily open auction chart.

 

Large commercials traders increased their long Chicago Board of Trade futures and options on futures positions by 18,717 contracts and added 26,524 contracts to their short positions and are now net short 499,905 contracts as of Dec. 31, the Commodity Futures Trading Commission reported Friday in the supplemental commitment of traders report. Large speculative traders bumped up their long positions by 10,545 contracts and increased their short holdings by 2,508 contracts and are now net long 233,470 contracts the CFTC said. Index funds added 3,188 contracts to their long positions and 452 contracts to their short positions and are net long 365,708 contracts, the CFTC said.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled little changed with the benchmark May contract up RMB/1 at 1,694RMB/tonne.

 

The weekly export inspections report is scheduled for release by the U.S. Department of Agriculture at 11:00 a.m.