May 29, 2007

 

CBOT Corn Outlook on Tuesday: Down 3-5 cents on favourable weather

 

 

Chicago Board of Trade corn futures are expected to begin daytime trading 3-to-5 cents lower as rain over the weekend and lower prices in overnight trade are expected to weigh on prices at the opening, analysts said.

 

In overnight electronic trading, July corn fell 3 1/2 cents to US$3.72 1/2 per bushel, September declined 4 3/4 cents to US$3.72 1/2 and December dropped 5 cents to US$3.70. E-CBOT volume in July was 7,046 contracts.

 

Corn should start out on the defensive, an analyst said. The rain over the long weekend extended into the eastern U.S. Midwest which trimmed some concerns about the recent dry weather in the region, he said. In addition, more rain is in the forecast for both the western U.S. Midwest as well as the eastern half of the U.S. corn belt for later this week which should also limit the upside, the analyst said.

 

In the western U.S. Midwest showers and thundershowers are forecast for Wednesday and Thursday with rainfall potential 0.50-1.50 inches and locally heavier west and 0.25-0.75 in eastern sections, DTN Meteorologix Weather said. Temperatures are expected to average below-to-below normal Wednesday and near-to-above normal Thursday.

 

In the eastern U.S. Midwest, dry weather with only a few light showers expected west on Wednesday and Thursday Meteorologix Weather said. Temperatures are forecast to average near-to-above normal.

 

In the 6-to-10 day outlook, temperatures are expected to average near-to-below normal, while rainfall should average near-to-above normal north and far east areas and near-to-below normal otherwise, Meteorologix Weather said.

 

On daily technical charts July closed nearer the session low Friday and prices should continue to trade within the May price range of US$3.54 and US$3.96 1/2 in the near-term, a technical analyst said.

 

First resistance for July is seen at US$3.79 3/4 Friday's high, and then at US$3.82 1/4. First support is seen at US$3.71 and then at US$3.67 1/4.

 

Large speculative traders reduced their long CBOT corn futures and options on futures positions by 13,523 contracts while adding 2,494 contracts to their short positions and are now net long 119,334 contracts, the Commodity Futures Trading Commission reported Friday.

 

Large commercial traders reduced their short futures and options on futures positions by 18,152 contracts and their long positions by 5,712 contracts and are now net short 399,930 contracts, the CFTC said.

 

In other corn news, South Korea feed makers have bought up to 110,000 metric tonnes of U.S. or South American corn, a commission house is reporting.

 

Corn futures on China's Dalian Commodities Exchange settled lower with the benchmark September contract down RMB9 at RMB1,664 per metric tonne.

 

Tuesday the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 11:00 a.m. EDT and the weekly crop conditions report at 16:00 p.m. EDT (2000 GMT).