June 12, 2006

 

CBOT Corn Outlook on Monday: Higher on dry weather concerns

 

 

Corn futures at the Chicago Board of Trade are expected to begin trading 4-6 cents higher Monday as concerns about dry weather forecast in the western U.S. Midwest and in other parts of the world are expected to underpin futures, floor sources said.

 

In overnight e-CBOT trading, July corn gained 6 cents to US$2.48 per bushel and December rose 6 1/4 cents to US$2.74.

 

The forecast is for dry weather in the western corn belt, and there is dryness in China, Australia, India and parts of Europe, a commission house analyst said.

 

The market took out some premium last week and it looks to put some back in, it all about the weather today, a floor analyst noted.

 

In the western U.S. Midwest, dry conditions with just a chance for a few light showers in western locations Tuesday and Wednesday are forecast through Thursday, said DTN Meteorologix Weather. Temperatures are expected to average near to below normal Monday and near to above normal Tuesday and Wednesday. In its 6-10 day outlook, temperatures are expected to average above normal with precipitation near to above normal north and near to below normal south, DTN Meteorologix Weather said.

 

In the eastern U.S. Midwest, dry conditions are predicted with only a few isolated light showers during Tuesday and Wednesday, with dry conditions expected on Thursday. Temperatures are forecast to average near to below normal early in the period and near to above normal later in the period, DTN Meteorologix Weather said. In its 6-10 day outlook, temperatures are expected to average near to above normal and rainfall near to below normal.

 

Large non-commercial traders reduced their long positions by 5,677 contracts as of June 6, the Commodity Futures Trading Commission reported Friday. In contrast, large commercial traders increased their long exposure, trimming their short positions by 11,452 contracts while decreasing their long positions by 5,887 contracts.

 

Cash corn basis bids were unchanged to higher Monday. Central, Illinois was up 3 cents at 8 cents under the July future.

 

On technical charts, Friday's low in July of US$2.40 1/4 is now strong near-term technical support, a technical analyst said. First resistance is seen at US$2.45 and then at US$2.47 1/2. First support is pegged at US$2.40 1/4, Friday's low and then at US$2.38.

 

In other corn news, Argentina had sold 5.32 million metric tonnes of 2005-06 corn for export, the Agriculture Secretariat reported Friday. By this time last year Argentina had sold 7.21 million tonnes.

 

The U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 10:00 a.m. CDT and Monday afternoon the weekly crop progress is scheduled for release at 3:00 p.m. CDT (2000 GMT).