March 12, 2007

 

CBOT Corn Outlook on Monday: Steady to down 1 cent; lacking fresh inputs

 

 

Chicago Board of Trade corn futures are called to open steady-to-1 cent lower as the lack of fresh inputs and slightly weaker tone in a quiet overnight session are expected to weigh on prices at the start of trading, a commission house analyst said.

 

In overnight electronic trading, May corn slipped 3/4 to US$4.16 3/4 per bushel and July also ended down 3/4 cent at US$4.26 3/4. E-CBOT volume in May was 4,778 contracts.

 

There isn't a lot of news to trade off of Monday morning so corn will probably pick up where it left off last night, a floor trader said.

 

The market will continue to consolidate ahead of the prospective plantings report, the commission house analyst said. Metals are slightly weaker and crude oil is lower, so corn will not see much help from the outside markets, he added.

 

Large speculative traders cut their long futures and options on futures positions by 31,251 contracts and added 8,935 contracts to their short positions and are now net long 271,805 contracts as of March 6 the CFTC reported Friday.

 

Large commercial traders increased their long positions by 13,572 contracts and reduced their short positions by 21,196 contracts, and are now net short 566,040 contracts.

 

On daily open auction technical charts, CBOT May corn closed lower Friday and at the weekly low close, a technical analyst said. Bulls are still on the defensive and need to work to fill a downside price gap on the daily bar chart created late last month and need to move above US$4.38 to fill the gap, the analyst said. The bears' next downside price objective is closing below solid support at last week's low of US$4.13.

 

First resistance is seen at US$4.23 1/2 and then at US$4.25. First support is pegged at US$4.16 1/4 and then at US$4.15.

 

Deliveries posted against the March future were 374 contracts. Large issuers included the customer account of FC Stone, which issued 119 contracts and the customer account of Cunningham Commodities, which issued 115 contracts.

 

Large stoppers included the customer account of Man Professional Clearing, which stopped 265 contracts. The last trade assigned was March 8. Preliminary open interest in March is 3,592 contracts.

 

In other corn news, Chinese corn exports in February were 770,000 metric tonnes and totaled 1.77 million in the January-February period, up 25% on the year, China's General Administration of Customs reported Monday.

 

Corn futures on China's Dalian Commodities Exchange settled modestly lower with the most active September contract down RMB5 at RMB1,684/tonne.

 

Monday morning, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report for the period ending March 8.