June 4, 2007

 

CBOT Corn Outlook on Monday: Flat-down 1 cents on weekend rain; choppy trade seen

 

 

Chicago Board of Trade corn futures are expected to begin day session trading steady-to-one cent lower Monday as weekend precipitation and favorable near-term weather is expected to weigh on prices at the opening, an analyst said.

 

In overnight electronic trading, July corn fell 3/4 cent to US$3.86 per bushel, September declined 1 1/4 cents to US$3.88 and December ended unchanged at US$3.83. E-CBOT volume in July was 4,494 contracts.

 

There were some spotty rains in the U.S. Midwest over the weekend and forecasts for additional moisture for this week which should weigh on prices at the start, a commission house analyst said. However, overnight forecasts predict a weak ridge will develop in the U.S. Midwest later in the two-week period and that should limit downside pressure, the analyst added. Any price weakness should be well supported he said. Dry weather in China should also temper selling interest, he added.

 

In the western U.S. Midwest, dry weather is expected Tuesday before rain returns to the northern sections of the region Wednesday with amounts 0.10-0.50 inch and locally heavier, DTN Meteorologix Weather said. Temperatures are expected to average near- to below-normal Tuesday and near- to above-normal Wednesday.

 

In the eastern U.S. Midwest, mainly dry weather is forecast for Tuesday and Wednesday with temperatures expected to average near- to below-normal.

 

In the 6- to 10-day outlook, temperatures are expected to average near- to above-normal with rainfall expected to average near- to above-normal west and near- to below-normal southeast, Meteorologix Weather said.

 

On daily technical charts July closed lower Friday on profit taking after challenging the upper boundary of a two-month old trading range, a technical analyst said. The bulls' next upside price objective remains closing prices above US$3.96 1/2, with the next downside price objective for the bears is closing prices below US$3.75 per bushel.

 

First resistance for July is seen at US$3.90, Friday's high and then at US$3.93 1/2. First support is seen at US$3.85, and then at US$3.80.

 

Large commercial traders increased their long CBOT corn futures and options on futures positions by 7,271 contracts while reducing their short positions by 4,171 contracts and are now net short 388,487 contracts as of May 29, the Commodity Futures Trading Commission reported Friday.

 

Large speculative traders trimmed their long futures and options on futures positions by 4,163 contracts and added 9,576 contracts to their short positions are now net long 105,595 contracts. Index funds increased their long positions by 5,289 contracts and their short holdings by 468 contracts and are now net long 349,587 contracts, the CFTC said.

 

In other corn news, prices of imported grains in Asia eased slightly as the new week began on cheaper freight costs, analysts said.

 

Corn futures on China's Dalian Commodities Exchange settled mostly lower with the benchmark September contract unchanged at RMB1,663 per metric tonne.

 

Monday morning, 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 progress report at 4:00 p.m. EDT (2000 GMT).