April 10, 2006

 

CBOT Corn Outlook on Monday: Steady to slightly higher after USDA

 

 

Corn futures at the Chicago Board of Trade are expected to open steady to slightly higher after Monday morning's release of April's supply and demand report from the U.S. Department of Agriculture, sources said.

 

The USDA reported 2005-06 corn ending stocks were 2.301 billion bushels, above the 2.259 average analyst estimate, and 50 million bushels below the 2.301 billion estimated in March by the USDA.

 

In overnight electronic trading, corn ended slightly higher, with May corn up 1/4 cent at $2.43 per bushel and July also up 1/4 cent at $2.54 3/4.

 

The ending stocks number was slightly below estimates but it wasn't a big deal, a CBOT floor trader said. The USDA raised its export projection by 50 million bushels but left other balance sheet items alone.

 

The early call on soybeans is higher and wheat was up overnight, so corn should draw some strength from the other pits, he added.

 

"Everything came in pretty much as expected," said Bob Anderson, an analyst with Commodity Services in Des Moines, Iowa. The market will trade the report for the first thirty seconds and then go back to trading the weather and outside markets, he said.

 

Precious metals and energies are sharply higher Monday morning, with crude oil, gold and silver all trading at higher levels.

 

Mostly dry weather with only a few light showers are expected Monday and Tuesday in the western U.S. Midwest with temperatures averaging above normal, DTN Meteorlogix Weather said.

 

In the eastern U.S. Midwest, mainly dry weather is expected for Monday and much of Tuesday, with a chance for a few light sprinkles Tuesday night into Wednesday, DTN Meteorlogix Weather added. Temperatures are expected to average above normal.

 

Large non-commercial traders were net long 139,315 corn futures and options on futures positions as of April 4, the Commodity Futures Trading Commission reported Friday afternoon. Long positions were increased by 38,745 contracts and long positions were decreased by 35,510 contracts from the previous report.

 

Based on preliminary volume and open interest, corn futures set another open interest record on Friday with open interest of 1,184,177 contracts.

 

On technical charts, July corn closed at weekly high on Friday and the bulls have gain upside technical power, a technical analyst said. First resistance for July corn is seen at $2.55, Friday's high and then at $2.58. First support is seen at $2.52 1/2 and then at $2.49 1/2, Friday's low.

 

In other corn news, corn futures on China's Dalian futures exchange settled lower as weakness in soy futures weighed on corn, market analysts said. The September contract settled RMB7 lower at RMB1,390/tonne.

 

Asian demand for corn is expected to remain light in the week ahead as buying from South Korea and Japan is expected to slow as importers have covered their April-June requirements, sources said.

 

Philippine corn production is likely to have increased 20% from low output in the same period a year ago, the Philippine Department of Agriculture said. Corn output in the January to March period is estimated to have reached 1.51 million metric tonnes from only 1.25 million in the same period last year, the agriculture secretary said in a statement.

 

Monday morning the USDA is scheduled to release the weekly export inspections report at 10:00 a.m. CDT (1500 GMT).