May 2, 2006

 

CBOT Corn Outlook on Tuesday: Seen 1/2-1 cent lower on planting progress

 

 

Corn futures at the Chicago Board of Trade are forecast to begin Tuesday's pit traded session 1/2 to 1 cent lower following weaker prices overnight and strong planting progress reported in Monday afternoon's weekly crop progress report, sources said.

 

In overnight e-CBOT trading, July corn fell 1 cent to US$2.47 per bushel and December corn slipped 3/4 cent to US$2.70 3/4.

 

The market should start out a little lower on the strong planting pace, a floor trader said. However, the outside markets are higher and the dollar is lower, which are all supportive he added.

 

The U.S. Department of Agriculture reported Monday afternoon that 52% of the U.S. corn crop had been planted, above the 49% planted in 2005 and above the five-year average of 42%.

 

Analysts had expected a figure near 50% complete.

 

Thirteen percent of the crop had emerged, compared with 12% last year.

 

People will focus on the fact that over 50% of the crop is planted and that the recent rain is favorable for crop development, a commission house analyst said. If there are a couple of dry days this week, next week's planting pace could reach 80%, he added.

 

In the western U.S. Midwest, mostly dry weather is expected Tuesday and Wednesday, with showers returning to southern sections of the region late Wednesday and into Thursday, DTN Meteorlogix Weather said. Mainly dry conditions are forecast for Friday ad Saturday. Temperatures will average near to below normal Wednesday and below normal Thursday, DTN Meteorlogix Weather added.

 

In the eastern U.S. Midwest, mostly light showers are forecast for the region over the next several days except in the southern portion of the region and the northern Delta, which could see rainfall averaging .50-1.50 inches, DTN Meteorlogix Weather said. Temperatures are expected to average near to above normal Tuesday and Wednesday and below normal in the north to above normal south on Thursday.

 

Deliveries posted against the May contract totaled 1,818 contracts. Issuers included the customer account of UBS Securities, which issued 586 contracts, the customer account of JP Morgan, which issued 397 contracts, and the customer account of Cunningham Commodities, which issued 279 contracts.

 

Stoppers included the customer account of Dowd Wescott Group which stopped 319 contracts, the customer account of E-Local, which stopped 537 contracts, and the customer account of SMW Trading which stopped 271 contracts.

 

On technical charts, first resistance for July corn is seen at US$2.50, and then at US$2.51 1/4, a technical analyst said. First support is seen at US$2.47 1/2, Monday's low and then at US$2.45.

 

In other corn news, China's Dalian futures exchange remains closed this week for the Labor Day holiday. Trading will resume on May 8.

 

Taiwan's Member Feed Industry Group, or MFIG, purchased 60,000 metric tonnes of U.S. origin corn Friday from Cargill, a company official said Tuesday.

 

Prices for corn delivered to Asia will move higher or lower depending on the weather outlook for the U.S. corn crop, Asian sources said Tuesday.

 

Asian buying interest is expected to be quiet as South Korean buyers have fulfilled most of their July-to-September needs and Japan is on holiday from Wednesday to Friday, they said.