March 27, 2006

 

CBOT Corn Outlook on Monday: Up 1-2 cents; e-CBOT, trade positioning

 

 

Corn futures on the Chicago Board of Trade are seen starting the week on firm footing, continuing the overnight theme as participants position themselves ahead of Friday's acreage and quarterly stock reports.

 

Analysts expect corn to open 1 to 2 cents per bushel higher.

 

In overnight electronic trading, May corn was 1 1/2 cent higher at $2.20 1/4, and July corn was 1 1/4 cent higher at $2.31 per bushel.

 

Going into a pretty major U.S. Department of Agriculture report Friday, the market is poised to see some position evening, and with world prices up overnight, a higher start is on tap, said Don Roose, president U.S. Commodities in West Des Moines, Iowa.

 

USDA is scheduled to release its prospective planting and quarterly grain stock reports Friday 7:30 a.m. CST (1330 GMT).

 

A quiet news front is expected to keep focus trading evening and technical factors with heavy volume e-CBOT gains, sharply higher metals prices overnight and improved feed demand in China setting the stage for the advances, traders add.

 

Meanwhile, favorable pre-planting weather conditions and ample nearby supplies are expected to limit upside potential.

 

Technical analysts say prices are still in a steep four-week-old downtrend on the daily bar chart. It will take a close back above resistance at $2.28 to provide the bulls with some fresh upside technical momentum. A close below technical support at last week's low of $2.17 would provide better downside technical momentum.

 

First resistance for May corn is seen at $2.21 1/4 - Friday's high - and then at $2.24. First support is seen at $2.18 1/4 - Friday's low - and then at $2.17. Cash corn basis bids were mostly unchanged across the Midwest.

 

DTN Meteorlogix Weather Service said mostly dry conditions are on tap for the eastern Midwest Monday, with showers expected in the western Midwest. Wet conditions are seen across the corn-belt Monday evening before drier conditions emerge Tuesday. At midweek, mostly dry conditions are forecast with a few light showers in the western belt Thursday, with showers and thunderstorms forecast for the region Thursday night and Friday. Temperatures are seen near to above normal during this period.

 

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 82,701 lots in corn as of March 21. Commercial firms held net long positions totaling 18,777 lots.

 

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 demand news, the Taiwan Sugar Corp., or TSC, is seeking 23,000 metric tonnes of corn and 12,000 tonnes of soybeans from the U.S. for May delivery in a tender to be concluded March 31, a trader in Taipei said Monday.

 

In overseas markets, corn futures on China's Dalian Commodity Exchange settled slightly higher on the spillover effect from soybeans and soymeal, analysts said. The most widely held September 2006 contract settled RMB4 higher at RMB1,407/tonne.

 

In other news, three people suspected of having bird flu have tested negative for the virus, following the death last week of a 3-year-old girl who was Cambodia's fifth bird flu fatality, officials said Monday.