May 1, 2007

 

CBOT Corn Outlook on Tuesday: Up 3-6 cents on poor US corn planting pace

 

 

Chicago Board of Trade corn futures are expected to open 3-to-6 cents higher Tuesday, following the tone established in overnight trading and the lower than expected planting pace in Monday's crop progress report, a commission house analyst said.

 

In overnight electronic trading, May corn gained 3 cents to US$3.61 per bushel, July rose 4 1/4 cents to US$3.71 3/4 and December gained 6 1/4 cents to US$3.70 3/4. E-CBOT volume in July was 6,014 contracts.

 

Corn should start trading higher based on the less-than-expected corn planting progress, though favorable planting weather forecasts for much of this week could temper the gains, the commission house analyst said.

 

The U.S. Department of Agriculture reported Monday afternoon that 23% of the U.S. corn crop had been planted as of April 29, well below the 48% seeded in 2006 as well as trader expectations that planting would be 27%-35 completed.

 

Several key states were well behind normal. In Iowa 14% of the crop has been seeded compared to 58% last year and the five-year average of 46%. In Illinois, 36% of the crop has been planted, compared to 66% last year and the five-year average of 59%.

 

Trading should be light and choppy as much of Asia as well as Europe are closed due to a holiday, a floor trader said. However, it is the first trading day of the new month and there could be some new money coming into the markets, he said.

 

In the western U.S. Midwest, mostly dry weather is forecast for Wednesday ad Thursday with the chance for light rain in Iowa and southern Missouri, DTN Meteorologix Weather said. Temperatures are expected to average near-to-above normal Wednesday and Thursday.

 

In the eastern sections of the region, there is a chance for a few light to moderate showers south with fair weather north on Wednesday and Thursday, Meteorologix Weather said. Rainfall will occur mainly south of a line stretching from St. Louis to Dayton, Ohio. Temperatures should average near-to-above normal Wednesday and Thursday.

 

In the 6-to-10 day outlook, rainfall is expected near-to-above normal west, near-to-below normal east and temperatures are expected to average near-to-above normal.

 

Deliveries posted against the May future were 1,785 contracts. Large issuers included the customer account of FC Stone which issued 380 contracts and the Astro division of UBS Securities, which issued 318 contracts. Large stoppers included the customer account of Man Financial, which stopped 508 contracts, and the customer account of Rosenthal Collins which stopped 904 contracts. The last trade assigned was April 18.

 

On daily technical charts, July corn closed near mid-range on Monday but trading should remain choppy between the April low of US$3.55 1/2 and the April high of US$3.93, a technical analyst said. A close above US$3.75 would help the bulls gain fresh upside technical momentum, the analyst said.

 

First resistance for July is seen at US$3.70 and then at US$3.72. First support is seen at Monday's low of US$3.63 and then at US$3.61.

 

In other corn news, corn futures trading in China was closed due to a holiday.