February 27, 2006

  

CBOT Corn Outlook on Monday: Down 1/2-1 cent; e-CBOT, bird flu worries

 

 

Corn futures on the Chicago Board of Trade are seen starting the week slightly lower, in step with overnight trade, with worries over the spread of bird flu applying mild pressure.

 

Analysts expect corn to open 1/2 to 1 cent per bushel lower.

 

In overnight electronic trading, March corn was 1 cent lower at US$2.26 3/4, and May corn was 3/4 cent lower at US$2.38 per bushel.

 

With the absence of fresh supportive news, the market may encounter some consolidation after setting new swing highs Friday, said John Kleist of Kleist Ag Consulting.

 

The spread of bird flu overseas, with China, Germany, Georgia and Indonesia reporting new cases over the weekend is expected to apply mild pressure as traders look for signs of what impact the outbreaks will have on global feed demand.

 

"This could be an excuse for light profit taking," added Kleist.

 

Expectations for heavy deliveries against the nearby contract on first notice day is seen keep pressure on March futures, but traders say over 4,000 March US$2.30 calls exercised on Friday - with ADM Investor Services the featured exerciser - may provide a psychological boost to keep prices underpinned.

 

Meanwhile, U.S. Department of Agriculture said private exporters reported the sale of 195,072 metric tonne of U.S. corn to Japan for delivery in the 2005-06 marketing year.

 

The Commodity Futures Trading Commission said Friday in its commitments of traders report that large speculative traders held net long futures and options positions totaling 145,892 lots in corn as of Feb. 21.

 

On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 10:00 a.m. CST (1600 GMT).

 

In news, China on Sunday warned the public of a possible "massive" bird flu outbreak among fowl, and said the country's agriculture officials were on high alert. The announcement came as China reported that two more people - who had both been around sick or dead birds - had died from the H5N1 bird flu strain.

 

A swan found dead in a nature park on Croatia's southern coast tested positive for the deadly H5N1 strain of bird flu, the country's Agriculture Ministry said Monday, and Georgia's President Mikhail Saakashvili Sunday introduced a state of emergency in a region where the ex-Soviet nation's first outbreak of bird flu has been reported.

 

Cash corn basis bids were mostly unchanged across the Midwest.

 

DTN Meteorlogix Weather Service said showers and possible thundershowers during the next 5 days will help replenish soil moisture supplies and favor crops in Argentina. In South Africa, widespread rain and thunderstorms were reported during the weekend with more possible this week. Surplus soil moisture through the region is becoming unfavorable for maize crops, Meteorlogix added. In overseas markets, corn futures on China's Dalian Commodity Exchange settled mixed, with the benchmark September 2006 contract unchanged at RMB1,482/tonne.

 

In other news, China's corn exports in January totaled on 413,848 metric tonnes down 14.7% from January 2005, the General Administration of Customs said Monday.