May 8, 2007

 

CBOT Corn Outlook on Tuesday: Down 10-12 cents on strong planting progress

 

 

Chicago Board of Trade corn futures are expected to start trading 10 to 12 cents lower Tuesday as better-than-expected planting progress and weaker prices overnight are expected to pressure futures, analysts said.

 

In overnight electronic trading, May corn declined 12 1/4 cents to US$3.57 1/4 per bushel, July fell 10 3/4 cents to US$3.68 1/4 and December also fell 10 3/4 cents to US$3.72 1/2. E-CBOT volume in July was 12,662 contracts.

 

Corn will be lower on the strong planting pace in the U.S. Midwest, a floor trader said. Any concerns that planting would be an issue are now fading, the trader added.

 

The U.S. Department of Agriculture reported that 53% of the U.S. corn crop was planted as of May 6, up 30 percentage points from last week, but below the five-year average of 63%.

 

Several states showed a large increase in planting. In Illinois, 72% of the crop has been planted, compared to 36% last week and the five-year average of 73%.

 

In Minnesota, 70% of the crop has been seeded, compared to the five-year average of 69%.

 

The weather is expected to remain favorable for planting this week so planting should continue to roll, a floor analyst said.

 

In the western U.S. Midwest, mainly dry weather is forecast Wednesday and Thursday, DTN Meteorologix Weather said. Temperatures are expected to average above normal.

 

In the eastern U.S. Midwest, there is a chance for light showers with locally heavier amounts on Wednesday and Thursday with temperatures averaging above normal in the period, Meteorologix Weather said.

 

In the 6- to 10-day outlook, temperatures are expected to average near-to-above normal with rainfall near-to-above normal northwest and near-to-below in the rest of the region.

 

On daily technical charts, July closed lower and traded a bearish "outside day" down on daily technical charts, a technical analyst said.

 

First resistance for July is seen at US$3.83, then at US$3.85 1/2. First support is seen at US$3.77 and then at US$3.75.

 

Deliveries posted against the May future were 2,085 contracts. Large issuers included the customer account of Kottke, which issued 675 contracts and the customer account of Man Financial, which issued 472 contracts. Large stoppers included the customer account of Cunningham, which stopped 745 contracts, and the customer account of Man Professional Clearing, which stopped 401 contracts. The last trade assigned was May 7.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled higher with the benchmark September contract up RMB9 at RMB1,662 per metric tonne.