May 30, 2006

 

CBOT Corn Outlook on Tuesday: Seen 1-3 cents higher on outside markets

 

 

Corn futures at the Chicago Board of Trade are predicted to begin pit trading 1-3 cents higher Tuesday as stronger prices in overnight trading and higher outside markets are expected to underpin prices, sources said.

 

In overnight e-CBOT trading, July corn gained 3 cents to US$2.57 per bushel and December also rose 3 cents to US$2.82.

 

Stronger outside markets will help support corn on the opening, a floor analyst said. Gold, silver and crude oil are all higher, the dollar is lower and that should benefit corn, he noted.

 

The weather was favorable to crop development over the weekend and the forecast is for continued good weather, but the outside markets are strong, a floor trader added.

 

In the western U.S. Midwest, scattered showers with amounts of .30-1.00 inch and locally heavier are forecast for Tuesday and Wednesday in parts of the region, DTN Meteorologix Weather said. Temperatures are expected to average near to below normal Tuesday and Wednesday.

 

In the eastern U.S. Midwest, scattered showers and thundershowers, with possible amounts of .25-1.00 inch are possible Tuesday and Wednesday. Temperatures are expected to average above normal Tuesday and near to above normal Wednesday, DTN Meteorologix Weather said.

 

Large non-commercial traders are now net long 263,617 corn futures and options on futures contracts as of May 23, the Commodity Futures Trading Commission reported Friday. Non-commercial traders decreased their long positions by 10,746 contracts and decreased their short positions by 3,640 contracts.

 

On technical charts, a push in July corn below support at the bottom of a price gap at US$2.47 1/2 would produce some near term chart damage, a technical analyst said. He pegs first resistance at Friday's high of US$2.57 1/2 and then at US$2.59 1/2. First support is seen at US$2.53 and then at US$2.52.

 

In other corn news, the Korean Corn Processing Industry Association or Kocopia, is seeking 110,000 metric tonnes of optional origin food corn in a tender to be concluded Thursday, an association official said.

 

Premiums for corn delivered to Asia may rise in the week ahead as demand for U.S. corn was strong last week and the continued absence of China from the corn export market has been pushing up U.S. exports, sources said.

 

Chinese corn exports in April totaled 40,086 metric tonnes.

 

The association of Philippine Feed Millers of PAFMI, has asked the Philippines government to allow entry of corn imports at preferential tariff rates given the high price of grain domestically.

 

Argentina sold 4.82 million metric tonnes of 2005-06 corn through May 26 compared to 7.02 million tonnes the same time last year, the Agriculture Secretariat said.

 

Corn futures on China's Dalian Commodities Exchange settled higher with the benchmark March 2007 contract up RMB6 at RMB1,546/tonne.

 

Tuesday morning the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 10:00 a.m. CDT and at 3:00 p.m., the weekly crop conditions report is scheduled to be released.