June 5, 2006

 

CBOT Corn Outlook on Monday: 1-2 cents lower on e-CBOT, weather

 

 

Corn futures at the Chicago Board of Trade are predicted to begin pit trading 1-2 cents lower as weaker prices in overnight trade and favorable weather are expected to exert a negative influence on prices at the opening, sources said.

 

Declines however are expected to be limited as stronger metals and energies markets plus a weaker dollar are supportive, they added.

 

In overnight e-CBOT trading, July corn fell 2 cents to US$2.57 1/2 per bushel and December declined 2 1/4 cents to US$2.82 3/4.

 

Current growing weather is favorable, the market was a little bit overdone Friday and the market was weaker overnight, a commission house analyst said.

 

However, losses could be limited as the energy and metals markets are higher, which could support futures.

 

Corn should open weaker to start but then trade both sides as the influence of the outside markets and the direction the funds want to go should help determine prices, a floor trader said.

 

Scattered to widely scattered thundershowers, with amounts of .25-1.00 inch are forecast in the western U.S. Midwest Monday and Tuesday with mainly dry conditions expected on Wednesday, DTN Meteorologix Weather said. Temperatures are forecast to average near to above normal in the period.

 

After mainly dry weather on Monday, there is a chance for scattered thundershowers with amounts of .10-.50 inch and locally heavier on Tuesday and Wednesday in the eastern U.S. Midwest, DTN Meteorologix Weather said. Temperatures are predicted to average near to above normal Monday and near to below normal Tuesday and Wednesday.

 

Large non-commercial traders are net long 267,950 futures and options on futures contracts as of May 30, an increase of 4,333 contracts from the previous report, the Commodity Futures Trading Commission reported Friday.

 

Large commercial traders were net short 159,743 futures and options of futures contracts, an increase of 2,295 contracts from the previous report.

 

On technical charts, July corn futures regained bullish momentum after filling a downside price gap, a technical analyst said. The next upside objective is to close prices above solid resistance at the May high of US$2.63 1/2. First resistance for July corn is seen at US$2.60, Friday's high and then at US$2.63 1/2. First support is pegged at US$2.58 and then at US$2.56.

 

Prices for corn in Asia are likely to increase in the week ahead as U.S. weather concerns are likely to underpin prices, Asian sources said.

 

Ukraine is expected to export 2.7 million metric tonnes of corn in the current marketing year, up from 2.33 million in 2004-05, the APK-Inform market analyst said Monday.

 

South Korea's Nonghyup Feed Inc. of NOFI, bought three 55,000 metric-tonne cargoes of U.S. origin corn in a tender concluded Friday, a company official said Monday.

 

Corn futures on China's Dalian Commodities Exchange ended higher on fresh buying, sources said. The March 2007 contract rose RMB/21 to RMB1,531/tonne.