April 11, 2006

 

CBOT Corn Outlook on Tuesday: Steady to 1/2 cent lower on e-CBOT, weather

 

 

Corn futures at the Chicago Board of Trade are expected to begin trading 1/2 to 1 cent lower Tuesday following the tonnee set in overnight trading and favorable planting weather forecasts, sources said.

 

In overnight e-CBOT trading, May corn slipped 1/2 cent to $2.40 3/4 per bushel, July fell 1 cent to $2.51 3/4 and December also fell 1 cent to $2.71 3/4.

 

The market is keying on the weather and its impact on corn planting progress, said Don Roose, president of US Commodities in West Des Moines, Iowa. People are watching the progress closely and if the progress is rapid, the idea is that it will translate into higher yields, he said.

 

In Monday's crop progress report, the U.S. Department of Agriculture reported that 3% of the US corn crop had been planted, compared to 6% last year and the 5-year average of 4%.

 

In addition, the 6-to-10 day weather forecast looks like corn will have weather that is conducive to planting.

 

The weather should keep corn on the defensive to start, a floor analyst agreed. However, there is not much news out to push the market one way or the other, he added.

 

In the US Midwest corn growing region, dry conditions are forecast for the western sections of the region with scattered light showers in the central and eastern US Midwest Tuesday and into Wednesday, DTN Meteorlogix Weather said.

 

Mostly dry conditions return Thursday through Saturday with scattered showers possible in the central and eastern areas. Temperatures are expected above normal during this time, DTN Meteorlogix Weather said.

 

CBOT corn futures set another open interest record on Monday based on preliminary volume and open interest with open interest at 1,187,774 contracts.

 

On technical charts, last week's high of $2.55 in July is strong overhead technical resistance but if July can close above it, it suggests another solid run up in prices, a market technician said. If the bears can fill on the downside the late-March upside price gap below $2.39, the bears would have solid downside technical power, he added. First resistance for July corn is pegged at $2.55, last week's high and then at $2.58. First support is seen at $2.50 3/4, Monday's low and then at $2.48.

 

In other corn news, South Korea's Nonghyup Feed Inc. or NOFI bought 55,000 metric tonnes of U.S. origin corn from ADM at 117 cents above the May CBOT future, a company official said. Delivery is scheduled for May 2-21.

 

Corn futures on China's Dalian futures exchange finished lower on long liquidation and light short selling analysts said. The September contract settled RMB17 lower at RMB1,373/tonne.