January 23, 2006

  

CBOT Corn Outlook on Monday: Higher, following overnight trade

 

 

Corn futures at the Chicago Board of Trade are predicted to begin Monday's open-auction session 1-2 cents higher, following the tone established in overnight trade, sources said.

 

In overnight e-CBOT trading, March corn gained 1 3/4 cents to US$2.06 3/4 per bushel, May corn rose 1 3/4 cents to US$2.16 3/4, and July corn gained 2 cents to US$2.25 3/4.

 

Higher soybean prices and concerns about the near term weather in South America underpinned prices overnight and should provide early strength for corn, a floor analyst said. Some weather forecasters are predicting hot and dry weather to return to corn and soybean producing regions of South America later in the week.

 

Soybeans were called to open 6-8 cents higher Monday.

 

Private analytical firm Informa Economics (formerly Sparks Co.) estimated corn planted acreage at 79.416 million acres in 2005-06, down 2.34 million acres from the previous year.

 

The Commodity Futures Trading Commission reported after the close Friday that large non-commercial speculators were net long 22,821 corn futures and options on futures contracts as of Jan. 17.

 

Cash corn basis bids were mostly unchanged to higher Monday morning. Central Illinois was unchanged at 3 cents over the March; with St. Louis was 2 cents higher, at 8 cents over the March future.

 

On technical charts, the next major downside price objective for the bears is to challenge major psychological support at US$2.00 a bushel, a technical analyst said. First resistance for March corn is seen at US$2.05 3/4, Friday's high and then at US$2.07. First support is seen at US$2.03 1/2, Friday's low, and then at US$2.02.

 

In other corn news, declining ocean freight rates on the U.S. to Asia shipping runs are expected to press premiums of corn delivered to Asia, traders based in Asia said.

 

Slack demand for corn and ideas that any rally in the next few months looks unlikely, is also expected to weigh on prices, sources said.

 

Corn futures traded on China's Dalian Futures Exchange ended higher Monday on positive sentiment, traders said. The most-active September contract gained RMB5, ending at RMB1,384/tonne.

 

The U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 10:00 a.m. (1600 GMT).