January 17, 2006

 

CBOT Corn Outlook on Tuesday: Down 1 cent, following overnight prices

 

 

Corn futures at the Chicago Board of Trade are expected to open one cent lower Tuesday, following the tone set in overnight activity after the long holiday weekend, sources said.

 

In overnight e-CBOT trading, March corn fell 1 cent to US$2.12 1/2 per bushel, May corn slipped 1 cent to US$2.22, and July corn ended unchanged at US$2.31 1/2.

 

The market should start off easier as there were good rains in Argentina over the weekend, the dollar is stronger and outside markets are weaker, a floor analyst said. If the market goes back to trading the fundamentals, prices should be lower as the fundamentals are bearish, he added.

 

The question is whether the index funds will be back in buying this morning, a commission house analyst said. If they are, the market should see some support, if not the market should be a bit weaker, he added.

 

Rainfall over the weekend has relieved recent stress on developing corn crops in Argentina with mostly dry weather forecast over the next several days, DTN Meteorlogix weather said.

 

Cash corn basis bids were mixed Tuesday morning. Central Illinois was unchanged at 3 cents over the March; with St. Louis was 2 cents lower, even with the March future.

 

Large non-commercial traders were net long 35,591 corn futures and options on corn futures contracts as of Tuesday, January 10, the Commodity Futures Trading Commission reported Friday.

 

On technical charts, technical analysts peg first resistance for March corn at US$2.14, Friday's high and then at US$2.15. First support is pegged at US$2.12 1/4, Friday's low and then at US$2.09 1/2, last week's low.

 

In other corn news, Taiwan Sugar Corp bought 20,000 metric tonnes of U.S. origin corn from Cargill in a tender concluded Tuesday, sources said.

 

Corn harvested in the Ukraine in 2005 totaled 7.1 million metric tonnes, down 19.4% on the year, according to the state statistics committee. Corn harvested area declined by 27.8% to 1.7 million hectares, while the average corn yield increased to 4.31 tonnes a hectare from 3.86 tonnes per hectare in 2004, the committee said.

 

Corn futures traded on China's Dalian Futures Exchange settled mixed Tuesday, with the most active September contract up RMB7, ending at RMB1,386/tonne.

 

China reported 32 bird flu outbreaks in 2005, the official Xinhua News Agency reported Tuesday.

 

The U.S. Department of Agriculture is scheduled to release the weekly export inspection figures at 10:00 a.m. CST. Last week, 29.086 million bushels of corn were inspected for export.