May 9, 2006

 

CBOT Corn Outlook on Tuesday: 2-3 cents higher on crop progress, e-CBOT

 

 

Corn futures at the Chicago Board of Trade are expected to start open auction trading 2-3 cents higher Tuesday as the weekly crop progress report and firm prices overnight are expected to underpin futures, floor sources said.

 

In overnight e-CBOT trading, July corn gained 3 cents to US$2.40 per bushel and December corn rose 3 1/2 cents to US$2.64 3/4.

 

The market should be supported by the planting progress which was on the low end of estimates with a couple of states behind last year and the five year average, a floor analyst said.

 

The U.S. Department of Agriculture reported corn planting in Minnesota at 56% as of May 7, below the 73% completed last year and behind the five-year average of 62%.

 

In Indiana, 52% of the corn crop was planted as compared to 72% in 2005 and the five-year average of 62%.

 

In addition, corn should be supported by higher prices in overnight activity, the outside markets are higher and there could be some position squaring ahead of Friday's U.S. Department of Agriculture supply and demand report, the analyst added.

 

In the western U.S. Midwest there is a chance for light rain or drizzle Wednesday before dry conditions return on Thursday, said DTN Meteorologix Weather. Temperatures are forecast near to below normal Wednesday and below to much below normal Thursday.

 

In the eastern U.S. Midwest, scattered showers and possible thunderstorms are possible Tuesday and Wednesday, with a chance for scattered sprinkles or light showers on Thursday, DTN Meteorologix Weather said. Rainfall should average .25-1.00 inch and locally heavier. Temperatures will average near normal Tuesday, near to below normal Wednesday and below normal Thursday, DTN Meteorologix Weather said

 

Deliveries posted against the May contract totaled 2,456 contracts. Issuers included the customer account of Dorman Trading, which issued 629 contracts, the customer account of Man Financial, which issued 406 contracts and the customer account of Dowd Westcott, which issued 290 contracts.

 

Stoppers included the customer account of Man Financial, which stopped 522 contracts, the Dowd Westcott Group, which stopped 314 contracts and the customer account of JP Morgan which stopped 292 contracts.

 

On technical charts, it will take a close above resistance at US$2.46 to provide the bulls with some fresh upside technical momentum, a technical analyst said. First resistance for July corn is seen at US$2.38 1/4, Monday's high and then at US$2.40. First support is pegged at Monday's low of US$2.35 1/2 and then at US$2.34.

 

In other corn news, South Korea's Korean Feed Association purchased 110,000 metric tonnes if U.S. corn from Mitsubishi in a tender concluded Tuesday, an association official said.

 

Taiwan Sugar Corp. is seeking 23,000 metric tonnes of U.S. origin corn in a tender to be concluded Thursday, a trader in Taipei said.

 

The Philippines will import at least 300,000 metric tonnes of corn this year due to a production shortfall, the vice-president of the Philippine Association of Feedmillers said.

 

Corn futures on China's Dalian Commodities Exchange settled higher with the January contract up RMB/18 higher at RMB 1,462/tonne.