April 4, 2006

 

CBOT Corn Outlook on Tuesday: 1/2-1 cent lower on market retracement

 

 

Corn futures at the Chicago Board of Trade are expected to begin trading 1/2 to 1 cent lower Tuesday as the market retraces some of last week's gains, amid forecasts for favorable weather in the U.S. corn belt, sources said.

 

In overnight e-CBOT trading, May corn fell 1 cent to $2.35 1/2, and July corn slipped 1 1/2 cents to $2.46 1/4.

 

Good moisture and forecasts for warmer weather next week will help with early planting progress, said Don Roose, president of US Commodities in West Des Moines, Iowa. However, after the big gains set last week, the market can't afford to move too much lower as it still needs to buy acres, he added.

 

The market should continue consolidating after last week's run up, a floor analyst said. The funds positioned themselves last week and now the focus will turn to the weather and planting progress. The market will be sensitive to crop progress and the weather as corn has little margin for error, the analyst added.

 

In the western U.S. Midwest, it will be mainly dry Tuesday and Wednesday before a chance for showers and possible rain beginning Thursday and lingering into Friday, DTN Meteorlogix Weather said.

 

In the eastern U.S. Midwest, rain is forecast to develop in the Delta Wednesday into Thursday with amounts of .25-1.00 inch possible, DTN Meteorlogix weather said.

 

On technical charts, the two key near-term technical benchmarks for May corn remain Friday's high of $2.43 and the upward gap between $2.28 and $2.35 on the daily bar chart created Friday, a technical analyst said. First resistance for May corn is pegged at $2.38 1/2, Monday's high and then at $2.40. First support is seen at $2.35 and then at $2.32 1/2.

 

In other corn news, corn futures on China's Dalian futures exchange settled at lower levels as weaker soybean prices weighed on corn futures, an analyst said.

 

The benchmark September 2006 contract settled RMB10 lower at RMB1,397/tonne.