January 8, 2007

 

CBOT Corn Outlook on Monday: Seen down 2-3 cents, following e-CBOT tone

 

 

Chicago Board of Trade corn futures are expected to start trading 2-to-3 cents lower Monday, following the weaker tone established on overnight trading and the lack of fresh news, sources said.

 

In overnight e-CBOT trading, March corn fell 3 1/4 cents to US$3.65 per bushel and May slid 2 1/4 cents lower to US$3.75 1/2. e-CBOT volume in March was 6,592 contracts.

 

The market was weaker overnight and corn should follow the overnight trend, a floor analyst said. There is little in the way of fresh fundamental news and price activity could be choppy after last week's late rally after the steep losses set earlier, he adds. The market is waiting on the government reports due out on Friday to provide some direction, the analyst added.

 

On day session open auction technical charts, March corn closed higher Friday after recent price weakness and hitting a fresh six-week low early in the session. The bulls' next upside price objective is filling the downside price gap created on the daily chart last week, pushing prices above US$3.87 1/2, a market technician said. The bears' next near-term downside price objective is closing prices below support at US$3.47 1/2, the bottom of the upside price gap created back in November, the technician said.

 

First resistance for March corn is seen at US$3.70 and then at US$3.75. First support is seen at US$3.65 and then at US$3.59.

 

Cash corn basis bids were unchanged Monday. Central Illinois was unchanged at 4 cents under March.

 

In other corn news, prices for corn delivered to Asia could move in either direction in the week ahead as traders wait for the crop production annual report set to be released by the U.S. Department of Agriculture on Friday, Jan. 12, sources said.

 

It is too early in the year to make significant purchases, with buying likely to emerge once prices start coming down for corn, sources added.

 

Brazil will auction 180,000 metric tonnes of corn Tuesday, the Agriculture Ministry said.

 

Corn futures prides on China's Dalian Commodities Exchange settled slightly higher, following the tone established on Friday at the CBOT, sources said. The most active September contract gained RMB/4 to settle at RMB1,682/tonne.

 

Monday morning the USDA is scheduled to release the weekly export inspections report at 11:00 a.m. EST and Monday afternoon the Commodity Futures Trading Commission is scheduled to release the weekly commitment of traders report for the period ending Jan. 2. The report was originally scheduled for release Friday afternoon.