April 16, 2007

 

CBOT Corn Outlook on Monday: Seen 4-6 cents lower on improving weather

 

 

Chicago Board of Trade corn futures are forecast to begin trading 4-to-6 cents lower Monday as moderating weather forecasts are expected to weigh on prices following the tone established in overnight activity, a commission house analyst said.

 

In overnight electronic trading, May corn fell 6 1/4 cents to US$3.62 3/4 cents per bushel, July declined 6 cents to US$3.75 1/2 and December dropped 6 cents to US$3.89. E-CBOT volume in May was 9,678 contracts.

 

Favorable weather forecasts for much of the U.S. Midwest this week is expected to weigh on prices at the opening a commission house analyst said. The warmer and drier weather should help farmers with planting after midweek after poor weather conditions seen last week the analyst added.

 

In the western U.S. Midwest mainly dry conditions are expected Monday with a few light showers possible on Tuesday before dry weather returns on Wednesday, DTN Meteorologix Weather said. Temperatures are expected to average near-to-above normal Tuesday and near normal Wednesday.

 

In the eastern sections of the region there is a chance for a few light showers with locally heavier amounts Tuesday into Wednesday, Meteorologix Weather said. Temperatures are expected near normal Tuesday and below normal Wednesday.

 

On daily technical charts, July corn prices finished higher Friday and at the weekly high close, a technical analyst said. Bulls have regained a bit of near-term technical strength but trading is expected to remain choppy, the analyst added.

 

First resistance for July is seen at Friday's high of US$3.82, and then at US$3.85 1/2. First support is seen at US$3.80 and then at US$3.73 1/2.

 

Large commercial traders cut their long CBOT corn futures and options on futures positions by 24,325 contracts and reduced their short positions by 5,980 contracts and are now net short 442,197 contracts as of April 10, the Commodity Futures Trading Commission reported Friday.

 

Large speculative traders increased their long corn futures and options on futures positions by 6,214 contracts and trimmed their short positions by 2,647 contracts and are now net long 162,203 contracts. Large index fund traders cut their long positions by 2,896 contracts and their short positions by 4,261 contracts and are now net long 347,939 contracts, the CFTC said.

 

In other corn news, recent cold and wet conditions in the U.S. preventing rapid corn planting should support corn prices in Asia, overseas analysts said.

 

South Korea's Korea Feed Association and Major Feedmill Group are jointly looking to purchase 495,000 metric tonnes of U.S. corn in a tender to be concluded Tuesday, traders in Seoul said Monday.

 

Philippine corn production rose 14% to 1.75 million metric tonnes in the first three months of the year as higher prices encouraged farmers to increase their planted acreage, a senior Philippine agriculture official said Monday. The strong output should help the country meet a record production target of 6.9 million tonnes for the year, the official said.

 

Corn futures on China's Dalian Futures Exchange settled lower with the September contract down RMB/10 at RMB1,658/tonne.

 

Monday at 11 a.m. EDT (1500 GMT), the U.S. Department of Agriculture is scheduled to release the weekly export inspections report.