May 7, 2007

 

CBOT Corn Outlook on Monday: 2-3 cents higher on e-CBOT, planting concerns

 

 

Chicago Board of Trade corn futures are forecast to begin day time trading 2-to-3 cents higher Monday, as spillover strength from higher prices overnight and concerns about the planting pace in the western U.S. Midwest following heavy rains this weekend, analysts said.

 

In overnight electronic trading, May corn rose 2 1/2 cents to US$3.83 3/4 per bushel, July gained 3 cents to US$3.93 3/4 and December rose 4 1/2 cents to US$3.895. E-CBOT volume in July was 12,509 contracts.

 

Corn should start out higher based-off the heavy rain received in the western corn belt, a commission house analyst said. In addition, spillover strength from the overnight session should be supportive, he added.

 

However, gains may be limited by ideas that planting activity was heavy in the eastern half of the region as well as Minnesota over the weekend and should continue this week with the mostly dry weather forecast, a floor analyst said.

 

Although the planting progress report due out this afternoon should still show corn planting behind normal, a big jump in the pace in seeding is expected which should also temper some buying enthusiasm, a floor trader said.

 

In the western U.S. Midwest there is a chance for light or locally moderate showers with amounts of .25-.75 inch in eastern locations Monday and lingering Tuesday, DTN Meteorologix Weather said. Temperatures are expected to average above normal.

 

In the eastern U.S. Midwest, any shower activity will be confined to northwestern sections Friday with light showers possible in western section son Tuesday. Temperatures are predicted to average above normal in this period.

 

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

 

On daily technical charts, July closed at its highest level in six-weeks and at the weekly high close. Bulls have gained fresh technical momentum however there is stiff technical resistance at US$4.00 per bushel, a technical analyst said.

 

First resistance for July is seen at US$3.93, then at US$3.96 1/2, and then at US$4.00. Thursday's high and then at US$4.00.

 

First support is seen at US$3.86 and then at US$3.80.

 

Large speculative traders boosted their long CBOT corn futures and options on futures positions by 15,585 contracts while adding 2,922 contracts to their short positions and are now net long 152,834 contracts, the Commodity Futures Trading Commission reported Friday.

 

Large commercial traders cut their long futures and options on futures positions by 11,073 contracts and added 8,661 contracts to their short positions and are now net short 429,061 contracts, the CFTC said. Index funds increased their long positions by 2,126 contracts and reduced their short positions by 1,832 contracts and are now net long 350,269 contracts.

 

In other corn news, corn futures trading in China remains closed due to the May Day holiday.

 

Monday morning at 11:00 a.m. EDT, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report.

 

At 4:00 p.m. EDT (2000 GMT) the USDA is scheduled to release the weekly crop progress report for the week ending May 6.