May 1, 2006

 

CBOT Corn Outlook on Monday: Up 1 cent on outside markets, spillover

 

 

Corn futures at the Chicago Board of Trade are expected to start open auction trading 1 cent higher as stronger outside markets and spillover from Friday's fund supported trade is expected to supply support, sources said.

 

In overnight e-CBOT trading, July corn gained 1/2 cent to US$2.49 1/2 per bushel and December corn rose 1 1/2 cents to US$2.73 1/4.

 

The outside markets are higher, the rain over the weekend delayed the planting a bit and there was a strong fund interest Friday that could carry over to today, a floor analyst said.

 

The market should start higher, a floor trader said. Seems like the fundamentals are taking a back seat to the funds and what they want to do. It appears that the market is in the funds hands right now, he added.

 

In the western U.S. Midwest there is a chance for light to locally moderate showers Monday and Tuesday with .10-.50 inch expected over much of the region, DTN Meteorlogix Weather said. Dry weather is forecast for Wednesday before light showers may occur on Thursday.

 

In the eastern U.S. Midwest, light to moderate showers with coverage of .25-1.00 inch is possible Monday, with a chance for additional showers on Tuesday and Wednesday in a narrow part of the region, DTN Meteorlogix Weather said.

 

Large non-commercial traders decreased their long positions by 5,169 contracts and their short positions by 1,101 contracts and are now net long 204,574 corn futures and options on futures contracts as of Apr. 25, the Commodity Futures Trading Commission reported Friday.

 

Deliveries posted against the May contract totaled 1,313 contracts. Issuers included the customer account of Bear Stearns, which issued 600 contracts and the customer account of UBS securities, which issued 167 contracts.

 

Stoppers included the customer account of Bank of America Securities, which stopped 441 contracts, and the customer account of Cunningham Commodities, which stopped 279 contracts.

 

On technical charts, bulls have some new technical momentum after July corn gapped higher on Friday and closed near the session high, a technical analyst said. However, it will take a close above US$2.50 to provide the bulls with better upside technical momentum, the analyst added. First resistance for July corn is seen at US$2.50 1/4, Friday's high and then at US$2.52. First support is seen at US$2.44 1/4 and then at US$2.42 1/2.

 

China's Dalian futures exchange is closed this week for the Labor Day holiday. Trading will resume on May 8.

 

The U.S. Department of Agriculture is scheduled to release the weekly export inspections at 10:00 a.m. CDT.