April 25, 2006

 

CBOT Corn Outlook on Tuesday: Seen 1 cent lower on planting progress

 

 

Corn futures at the Chicago Board of Trade are expected to begin Tuesday's open auction trading session 1 cent lower following Monday's planting progress report and a quiet session overnight, sources said.

 

In overnight e-CBOT trading, May corn slipped 3/4 cent to US$2.32, July also fell 3/4 cent to US$2.43 1/2, and December slipped 3/4 cent to US$2.66 1/4.

 

The market will try and start out lower Tuesday morning as planting progress was at the top end of the range of expectations and realistically, corn planting is probably nearer 35% planted, said Don Roose, president of US Commodities in West Des Moines, Iowa.

 

However, outside markets are firmer Tuesday with copper at new all-time highs, and corn could see some spillover support, he said.

 

The market should have a lot of the negative news dialed in already and it could start out lower Tuesday and then close higher, Roose added.

 

Monday afternoon, the U.S. Department of Agriculture reported that 25% of the U.S. corn crop had been planted, slightly below the 28% planted in 2005, but above the 5-year average of 22%.

 

In Iowa, the nation's largest corn producing state, 26% of the crop has been planted, above the 15% planted in 2005 and the 5-year average of 16%.

 

Dry conditions are forecast for Tuesday and Wednesday in the western U.S. Midwest, DTN Meteorlogix Weather said. A chance for rain develops late Wednesday with showers and possible rain Friday and into Saturday with amounts 0.25-1.00 inch possible, DTN Meteorlogix Weather said. Temperatures are forecast to average below or much below normal.

 

In the eastern U.S. Midwest, mainly dry conditions are expected Wednesday through Friday, before a chance for showers or rain developing Friday night and continuing through the weekend, DTN Meteorlogix Weather said.

 

Temperatures are expected to average below normal Wednesday and near to below normal Thursday, DTN Meteorlogix Weather said.

 

On technical charts, if the bears can fill on the downside the upside price gap created in late March, meaning a move below US$2.39, they would gain solid downside technical power, a technical analyst said. First resistance for July corn is pegged at US$2.48 and then at US$2.50. First support is seen at US$2.43 3/4, Monday's low and then at US$2.42, the technical analyst said.

 

In other corn news, China's corn exports in January through March totaled 2.191 million metric tonnes, up 28.4% from a year ago, according to China's General Administration of Customs. Corn exports in March totaled 771.7 thousand metric tonnes, down 29.8% from a year ago.

 

Corn futures on China's Dalian futures exchange finished lower with the January contract down 12RMB at RMB1,393/tonne.