May 14, 2007

 

CBOT Corn Outlook on Monday: Down 1-2 cents on e-CBOT, weekend planting pace

 

 

Corn futures on the Chicago Board of Trade are poised for a slightly lower start to Monday's day session, taking its cue from overnight trade, with good weekend planting progress and profit taking weighing on prices, analysts said.

 

Analysts expect corn to open 1 to 2 cents lower.

 

In overnight electronic trading, July corn was 1 3/4-cent lower at US$3.67 1/2, and December corn was 1 1/2-cent higher at US$3.73.

 

The market saw some huge planting progress over the weekend, and that should apply some pressure, with traders taking the opportunity to take some profits after Friday's strong gains, a CBOT floor analyst said.

 

However, crop conditions are not ideal and lingering crop uncertainties linger, providing underlying support, traders said. Friday's strong technical close will provide strength with traders looking buy breaks if follow through selling does not emerge, analysts added.

 

A technical analyst said Friday's price action suggests a continued choppy trading range between last week's low of US$3.54 and the May high of US$3.96 1/2. The next downside price objective for July corn is closing prices below solid support at US$3.54 a bushel. Market bulls would regain some fresh upside technical momentum by pushing prices above US$3.77, which would fill on the upside last week's big downside price gap on the daily bar chart, he reports.

 

First resistance for July corn is seen at Friday's high of US$3.70 and then at US$3.77. First support is seen at US$3.65 and then at US$3.61.

 

The DTN Meteorlogix Weather Service forecast said thundershowers Monday night and Tuesday may lead to field work and planting delays in the western corn-belt, especially in the already too wet areas of Nebraska, western and southern Iowa and northern Missouri. In the eastern Midwest, favorable planting weather continues Monday but some delay is possible tomorrow into Wednesday. A fairly cool high may lead to some frost later this week, especially in the north and east areas. Any emerged corn may be burned back somewhat if frost occurs, Meteorlogix added.

 

The U.S. Department of Agriculture Monday announced private export sales of 120,000 metric tonnes of U.S. corn for delivery to Egypt in the 2006-07 marketing year.

 

Large speculative traders decreased CBOT corn futures and options positions by 13,229 lots and increased shorts by two lots in the week ended May 8, the CFTC said Friday afternoon in a supplemental report. The traders were net long 139,602. Index funds lifted long positions by 1,775 lots and shorts by 249 lots, according to the CFTC. They were net long 351,795 contracts.

 

Deliveries posted against the May future were 448 contracts. Large issuers included the customer account of Man Professional Clearing, which issued 136 contracts. Large stoppers included the house account of Goldman Sachs and Company, which stopped 182 contracts, and the house account of ADM Investor Services, which stopped 71 contracts. The last trade assigned was May 11.

 

On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EDT (1500 GMT) and weekly crop progress reports at 4:00 p.m. EDT.

 

In overseas markets, corn futures traded on the Dalian Commodity Exchange settled higher on the report. The benchmark September 2007 contract settled RMB18 higher at RMB1,684/tonne.