April 30, 2007

 

CBOT Corn Outlook on Monday: Down 7-9 cents on favorable planting weather

 

 

Chicago Board of Trade corn futures are predicted to begin trading 7-to-9 cents lower Monday as weather favorable for planting the U.S. corn crop this week and follow through selling from the lower prices in overnight activity are expected to weigh on prices, a floor analyst said.

 

In overnight electronic trading, May corn declined 9 1/4 cents to US$3.55 per bushel, July fell 7 3/4 cents to US$3.66 and December lost 6 1/4 cents to US$3.61 1/4. E-CBOT volume in July was 15,986 contracts.

 

Weather over the weekend was favorable for planting and the forecast for much of this week remains favorable as well and should keep corn prices on the defensive, a floor analyst said. Earlier concerns whether farmers would be able to plant all the corn acres forecast are fading as the forecast should allow farmers to rapidly plant their crop, the analyst said.

 

In the western U.S. Midwest, mainly dry weather is forecast for much of this week until the weekend which should help planting conditions, DTN Meteorologix Weather said. A few light showers are possible in southern areas of the region Tuesday with dry weather on Wednesday. Temperatures are expected to be above normal both Tuesday and Wednesday.

 

In the eastern sections of the region, there is a chance for a few light showers Tuesday with dry weather expected on Wednesday, Meteorologix Weather said. Temperatures should average near-to-above normal Tuesday and Wednesday.

 

In the 6-to-10 day outlook, temperatures are expected to average near-to-above normal. Precipitation is forecast near-to-above normal west and near-to-below-normal east, DTN Meteorologix Weather said.

 

Deliveries against the May contract were larger than expected and could also weigh on the nearby months, a commission house analyst said.

 

Deliveries posted against the May future were 1,723 contracts. Large issuers included the house account of ADM Investor Services which issued 1,628 contracts. Large stoppers included the customer account of FC Stone, which stopped 380 contracts, the customer account of UBS, which stopped 284 contracts, and the customer account of Calyon Financial, which stopped 250 contracts. The last trade assigned was March 29.

 

On daily technical charts, July corn closed lower but near the session with choppy trading continuing, a market technician said.

 

First resistance for July is seen at US$3.75, Friday's high and then at US$3.80. First support is seen at Friday's low of US$3.67 1/4 and then at US$3.65.

 

Large commercial traders reduced their overall positions in CBOT corn futures and options on futures, the CFTC reported Friday. Large commercial traders reduced their short futures and options on futures positions by 36,270 contracts and cut their long holdings by 36,896 lots and are now net short 409,327 contracts as of April 24, the CFTC reported Friday.

 

Large speculative traders increased their long futures and options on futures positions by 4,240 contracts and added 1,724 contracts to their short positions and are now net long 140,171 contracts, the CFTC said

 

In other corn news, prices for corn delivered to Asia may decline in the week ahead as forecasts for drier U.S. weather this week are expected to help speed the planting of U.S. corn, analysts said.

 

Corn futures on China's Dalian Futures Exchange settled lower ahead of the long holiday with the September contract down RMB/2 at RMB1,653/tonne. Chinese markets will be closed May 1-7 for the Labor Day Holiday.

 

The U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 11:00 a.m. EDT and the weekly crop progress report at 4:00 p.m. EDT (2000 GMT).