March 13, 2007

 

CBOT Corn Outlook on Tuesday: 1/2-1 cent lower on follow through, e-CBOT

 

 

Chicago Board of Trade corn futures are expected to open 1/2 to 1 cent lower Tuesday as follow-through selling from Monday's poor close and slightly weaker prices overnight are expected to weigh on prices, a floor broker said.

 

In overnight electronic trading, May corn fell 3/4 to US$4.08 1/2 per bushel and July slipped 1 cent to US$4.18 3/4. e-CBOT volume in May was 7,901 contracts.

 

Corn was slightly lower overnight and there could be some follow through from Monday's price weakness based on acreage concerns, a floor trader said. Beyond that there is not much news to influence the market, he added.

 

Crude oil is higher and the dollar is lower, which could be supportive; however, a lot depends on if the funds want to sell more corn, a commission house analyst said. Monday, commodity fund selling in corn was estimated at 9,000 contracts.

 

In addition, the market looks weak technically, but it could be a choppy two-sided trade, the analyst added.

 

On daily open auction technical charts, CBOT May corn reached a fresh five-week low on daily technical charts as the lack of bullish news and concerns over the potential of much higher U.S. corn planted acreage this year pushed prices lower, a technical analyst said.

 

The bulls' next upside price objective is closing prices above chart resistance at US$4.30 per bushel, while the bears' next target is closing prices below solid chart support at US$4.03 1/2.

 

First resistance is seen at US$4.15 and then at US$4.18 1/2. First support is seen at US$4.07 1/4 and then at US$4.03 1/2.

 

In the U.S. Midwest, there is a chance for light showers Wednesday with dry weather west and light rain possible east on Thursday, DTN Meteorologix Weather said. Temperatures are expected well above normal Wednesday and near-to-above normal Thursday.

 

Deliveries posted against the March future were 314 contracts. Large issuers included the customer account of Man Professional Clearing, which issued 205 contracts and the customer account of Iowa Grain, which issued 50 contracts.

 

Large stoppers included the customer account of the Astro Division of UBS Securities, which stopped 154 contracts and the customer account of Cunningham Commodities, which stopped 87 contracts. The last trade assigned was Mar. 9.

 

In other corn news, Mexico's Economy Ministry has raised the 2007 quota for duty-free corn imports from any country to 1.6 million metric tonnes. This is the third time this year the country has raised the quota as local supplies are unable to meet demand.

 

The Philippines is targeting 2007 corn production at 6.9 million metric tonnes, up 13% from last year through increased use of high-yielding hybrid seeds, the Department of Agriculture said Tuesday.

 

Corn futures on China's Dalian Commodities Exchange settled mostly higher with the most active September contract up RMB6 at RMB1,690/tonne.