May 23, 2006

 

CBOT Corn Outlook on Tuesday: Steady-up 1 cent on outside markets, e-CBOT

 

 

Corn futures at the Chicago Board of Trade are expected to start open outcry trading steady to 1 cent higher Tuesday on higher outside markets and firm prices in overnight trade, sources said.

 

In overnight e-CBOT trading, July corn gained 1 cent to US$2.55 1/2 per bushel and December corn rose 3/4 cent to US$2.79 1/2.

 

Corn was higher in overnight trading and the outside markets are higher and right now that's all the market needs to get off to a better start, a floor trader said.

 

Wheat was a leader Monday and the crop progress report had conditions declining more than expected, so it could be a leader again, a commission house analyst said.

 

Monday afternoon the U.S. Department of Agriculture reported that 92% of the U.S. corn crop had been planted as of May 21, in line with analyst expectations.

 

Overall, 66% of the crop was rated in good-to-excellent condition, 3 percentage points higher than a year ago.

 

In key corn producing states of Iowa and Illinois, 68% and 73% of the crop was rated in good-to-excellent condition respectively.

 

In the western U.S. Midwest, scattered thunderstorms, with amounts 0.30-1.00 inch and locally heavier, are forecast Tuesday night into Wednesday, DTN Meteorologix Weather said. Temperatures are expected to average above normal Tuesday and Wednesday and near normal Thursday.

 

The eastern U.S. Midwest is forecast to have dry weather conditions before scattered showers and thundershowers are forecast for Wednesday into Thursday with amounts 0.25-1.00 inch and locally heavier. Temperatures are expected to average near to above normal Wednesday and Thursday, DTN Meteorologix Weather said.

 

On technical charts, bulls will have to fill Friday's downside price gap on the upside, meaning above US$2.59 1/2 in July to regain some fresh technical momentum, a technical analyst said. First resistance is seen at Monday's high of US$2.54 3/4 and then at US$2.57 1/2. First support is pegged at US$2.52 1/2 and then at US$2.50.

 

In other corn news, South Korea's Major Feedmill Group, MFG, purchased 55,000 metric tonnes of U.S. origin corn from Cargill in a tender concluded on Tuesday, a group official said.

 

Taiwan's Member Feed Industry Group, or MFIG, has bought 60,000 metric tonnes of U.S. origin corn from Cargill in a tender completed Tuesday, a Taipei based trader said.

 

Corn futures on China's Dalian Commodities Exchange settled higher on fresh buying analyst said, with the March contract ending RMB/11 higher at RMB 1,502/tonne.