March 10, 2008

 

CBOT Corn Outlook on Monday: Down 10-13 cents; follow through sales, spillover

 

 

Corn futures on the Chicago Board of Trade are poised for a lower start to Monday's day session, influenced by spillover pressure from limit down moves in soybeans and soyoil overnight, traders said.

 

Analysts expect corn to open 10 to 13 cents lower.

 

In overnight electronic trading, March corn was 10 3/4 cents lower at US$5.22 3/4, May corn was 13 1/4 cents lower at US$5.345, July corn was 13 1/2 cents lower at US$5.45 1/2, and December corn was 13 1/4 cents lower at US$5.46.

 

Carryover selling from Friday's limit down slide coupled with spillover weakness from the soy complex is expected to lead prices lower, as the market backpedals from record highs set previously, analysts said.

 

Broad-based selling in commodities is seen aiding the losses, as speculative funds book profits across a broad spectrum of hard asset futures, analysts added.

 

Crude oil and metal futures are all retreating in early morning trade.

 

Otherwise, futures have little other fresh fundamental directives to lead the market, with worries over the U.S. economy seen increasing speculative funds willingness to trim some length in the market, analysts said.

 

A technical analyst said market bulls are fading, but still have the overall near-term technical advantage. The next upside price objective is to push and close July corn above solid resistance at US$5.70. The next downside price objective is to push and close prices below solid support at US$5.50.

 

First resistance for July corn is seen at US$5.66 3/4 and then at US$5.70. First support is seen at US$5.55 and then at US$5.50.

 

Index funds boosted their CBOT long corn futures and options on futures positions by 14,210 contracts while adding 1,385 contracts to their short positions and are now net long 433,407 contracts as of March 4, the CFTC reported Friday in the supplemental commitment of traders report. Commercial traders increased their short positions by 12,478 contracts and are now net short 604,942 contracts. Speculative traders decreased their long positions by 4,360 contracts and added 4,215 contracts to their short holdings and are now net long 240,961 contracts, the CFTC said.

 

In other news, China exported 30,000 metric tonnes of corn in February, according to preliminary data issued by the General Administration of Customs Monday. This is down 96% from on year, based on previous customs data. The country exported 60,000 tonnes of corn in the first two months of this year, down 96.5% on year, the data show.