June 11, 2007

 

CBOT Corn Outlook on Monday: Up 8-10 cents on weather, USDA report neutral

 

 

Chicago Board of Trade corn futures are expected to start day time trading 8-to-10 cents higher as weather forecasts are expected to provide support to prices after Monday's neutral supply and demand report from the U.S. Department of Agriculture, analysts said.

 

In overnight electronic trading, July corn jumped 10 1/2 cents to US$3.92 1/2 per bushel, September gained 9 1/4 cents to US$3.99 1/2 and December rose 8 3/4 cents to US$4.01. E-CBOT volume in July was 11,351 contracts.

 

The USDA reported that 2006-07 corn ending stocks increased by 50 million bushels to 987 million bushels with 2007-08 ending stocks also increasing by 50 million bushels to 997 million.

 

2006-07 ending stocks were expected to increase by 10 million bushels according to the average analyst estimate, while 2007-08 ending stocks were expected to increase by 50 million bushels according to a pre-report survey of analysts.

 

"Overall this report was pretty much a vanilla report, ending stocks going up slightly in corn was pretty much anticipated," said Don Roose, president of US Commodities in West Des Moines, Iowa. "Weather probably trumps this report and it did overnight, it could be a key day to add premium. Bulls were relieved that the USDA did not raise yields in corn with the good crop condition ratings," Roose said.

 

The current weather charts include a weak-to-moderate ridge over the Gulf Coast states which is expected to shift west and weaken during the next several days, before a new ridge forms over the Great lakes and settles into the eastern U.S. Midwest, DTN Meteorologix Weather said.

 

The ridge should keep rain out of the U.S. Midwest Corn Belt most of this week and the eastern belt is dry and needs some moisture, an analyst said.

 

In the near-term outlook for the western U.S. Midwest, there is a chance for a few scattered thundershowers Monday with mainly dry weather Tuesday, Meteorologix Weather said. Temperatures are expected to average near-to-above normal.

 

In the eastern U.S. Midwest, mainly dry weather is expected through Wednesday. Temperatures are predicted to average near-to-below normal Monday and near-to-above normal Tuesday and Wednesday, Meteorologix Weather said.

 

In the 6-to-10 day outlook, temperatures are expected to average above normal early in the period and near-to-below normal later. Rainfall should average near normal.

 

On daily technical charts July closed lower and prices are still within a well-defined trading range, a technical analyst said. The bulls' next upside price objective remains closing prices above the May high of US$3.96 1/2 per bushel, with the next downside objective for the bears is closing prices below solid support at this week's low of US$3.71 1/2 per bushel.

 

First resistance is seen at US$3.86 1/2 and then at US$3.90. First support is seen at US$3.76 1/2 and then at US$3.75.

 

Large speculative traders increased their long CBOT corn futures and options on futures positions by 22,184 contracts while reducing their short positions by 22,236 contracts and are now net long 150,016 contracts as of June 5, the CFTC reported Friday. Large commercial traders cut their long futures and options on futures positions by 26,807 contracts and added 29,966 contracts to their short positions are now net short 445,261 contracts. Index funds increased their long positions by 8,602 contracts and their short holdings by 913 contracts and are now net long 357,276 contracts, the CFTC said.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled lower with the benchmark September contract down RMB/10 at RMB1,646 per metric tonne.

 

Monday, the USDA 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).