March 19, 2007

 

CBOT Corn Outlook on Monday: Up 2-3 cents on follow through from Friday

 

 

Chicago Board of Trade corn futures are expected to begin day session trading 2-to-3 cents higher Monday, following higher prices in overnight activity and following Friday's higher close, a floor analyst said.

 

In overnight electronic trading, May corn gained 2 1/2 cents to US$4.02 per bushel, July rose 2 3/4 cents to US$4.13 1/2 and December gained 2 cents to US$4.05. E-CBOT volume in May was 4,466 contracts.

 

Corn should start higher on follow through buying and short covering after Friday's gains and the firm tone in overnight activity, a floor trader said. The lack of fresh news will continue to limit buying and selling interest, the trader added.

 

Although the market staged a technical rebound Friday, the close was well off of the highs, and that could limit the upside, a commission house analyst said. However, it appears that people still want to buy market setbacks, and the planting intentions report still looms over the market, the analyst added.

 

A wet weather forecast should also be supportive, an analyst said. The forecasts predicts above average precipitation in the next week to 10 days leading to worries about the potential for planting delays this spring, the analyst said.

 

In the U.S. Midwest mostly dry conditions are predicted Tuesday before rain develops Tuesday night into Wednesday, DTN Meteorologix Weather said. Amounts expected range from 0.25-1.00 inch. Temperatures are expected to average near-to-above normal in the period, Meteorologix Weather said.

 

On daily open auction technical charts, CBOT May corn closed higher Friday after making a new two-month low earlier in the session, a technical analyst said. May corn remains in a three-week-old down trending channel on the daily bar chart. Market bulls need to close prices above solid chart resistance at US$4.15 to regain new upside technical momentum, the analyst said.

 

First resistance is seen at US$4.00 and then at US$4.05. First support is seen at US$3.96 1/2 and then at US$3.92 1/4.

 

Large commercial traders cut their short CBOT corn futures and options on futures positions by 12,271 contracts and added 21,453 contracts to their long positions and are now net short 532,315 contracts as of Mar. 13, the CFTC reported Friday.

 

Large speculative traders cut their long positions by 32,972 contracts and reduced their short positions by 1,796 contracts and are now net long 240,629 contracts, the CFTC said.

 

In other corn news, corn prices in Asia are expected to trade lower this week as traders are beginning to become increasingly convinced that U.S. farmers will sharply increase U.S. corn acreage this year, analysts said.

 

Corn futures on China's Dalian Commodities Exchange settled modestly higher with the most active September contract up RMB6 at RMB1,696/tonne.

 

Monday, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report for the week ending March 15 at 11:00 a.m. EDT.