May 22, 2006

 

CBOT Corn Outlook on Monday: 3-4 cents lower on outside markets, weather

 

 

Corn futures at the Chicago Board of Trade are forecast to open 3 to 4 cents lower Monday as lower outside markets and forecasts for favorable weather are expected to weigh on prices, sources said.

 

In overnight e-CBOT trading, July corn declined 3 1/4 cents to US$2.49 1/2 per bushel and December corn fell 4 cents to US$2.73 1/4.

 

The outside markets and the weather are negative for corn this morning, a floor analyst said.

 

Gold and silver were lower in overnight trading and weaker this morning and the weather forecast looks good for the development of the crop, he added.

 

In the western U.S. Midwest dry conditions are expected Monday before a chance for scattered showers and thundershowers on Tuesday and Wednesday with .25-1.00 inch and locally heavier, DTN Meteorologix Weather said. Temperatures are forecast to average near to above normal.

 

The eastern U.S. Midwest is expected to be mainly dry Monday and Tuesday with a chance for scattered showers with amounts .10-.50 and locally heavier in western areas Wednesday, DTN Meteorologix Weather said. Scattered showers and thunderstorms are forecast Wednesday night into Thursday.

 

Large non-commercial traders are net long 270,723 futures and options on corn futures contracts as of May 16, the Commodity Futures Trading Commission reported Friday. Long positions increased by 56,345 contracts, while short positions decreased by 26,072 contracts.

 

On technical charts, bears have fresh downside momentum heading into the new trading week, a technical analyst said. The next price objective in July is filling on the downside the big upside price gap created on the daily bar chart May 12, he noted. First resistance for July is seen at US$2.57 1/2, Friday's high and then at US$2.59 1/2, the top of Friday's downside price gap. First support is seen at US$2.52 1/2, Friday's low and than at US$2.50.

 

In other corn news, prices of corn delivered to Asia are expected to decline in the week ahead as CBOT corn futures may fall, sources in Asia said. Despite expected healthy demand in Asia from South Korea and Taiwan, which are likely to purchase U.S. origin corn this week, corn futures are likely to fall on continued news of good weather for the U.S. corn crop, sources said.

 

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

 

Taiwan's Member Feed Industry Group, of MFIG, is seeking 60,000 metric tonnes of U.S. origin corn in a tender to be concluded on Tuesday, a group official said on Monday.

 

Corn futures on China's Dalian Commodities Exchange settled mixed, with the March contract ending RMB/9 lower at RMB 1,491/tonne.

 

Monday morning at 10:00 a.m. CDT, the USDA is scheduled to release the weekly export inspections and at 3:00 CDT (2000 GMT), the USDA is scheduled to released the weekly crop conditions report.