June 14, 2006

 

CBOT Corn Outlook on Wednesday: Steady-mixed on neutral weather outlook

 

 

Corn futures at the Chicago Board of Trade are expected to begin open outcry trading steady to mixed as the market looks to other markets for direction in the absence of a definitive weather forecast, sources said.

 

In overnight e-CBOT trading, July corn slipped 1/2 cent to US$2.42 3/4 per bushel and December fell 3/4 cent to US$2.68.

 

The weather forecast is neutral, a floor source said. There is some heat in the forecast but there is also some rain as well, so it could be tough to move the market in either direction based on the weather, he added.

 

Corn should trade both sides Wednesday, a commission house analyst said. It could follow the soybeans this morning and the market will also keep a close eye on the metal markets, which are staging a slight recovery from Tuesday's losses. There isn't much other market moving news, he added.

 

The National Oilseed Processors Association reported its members crushed 138.6 million bushels of soybeans in May, above the average analyst estimate of 133.3 million.

 

In the western U.S. Midwest, mainly dry conditions with a few light showers in the north and far west are forecast for Wednesday and Thursday, with scattered showers with amounts up to .50 inch on Friday, DTN Meteorologix Weather said. There is a chance for scattered thundershowers raining .10-.75 inch on Saturday in parts of the region. Temperatures are forecast to average at near- to above-normal for most of the area during this time, DTN Meteorologix Weather said.

 

In the eastern U.S. Midwest, mainly dry conditions with only a few light showers are forecast over the next several days, with a chance for scattered showers with amounts of .10-.50 inch and locally heavier on Sunday, DTN Meteorologix Weather said. Temperatures are forecast near- to above-normal early in the period and above-normal later in the period.

 

Cash corn basis bids were unchanged to mostly higher Wednesday. Keokuk, Iowa was 2 1/2 cents higher at 15 cents under the July future.

 

On technical charts, last week's low of US$2.40 1/4 is strong near-term support, a technical analyst said. First resistance for July corn is seen at US$2.45 and then at US$2.47. First support is seen at US$2.42 1/4 - Tuesday's low - and then at US$2.40 1/4.

 

In other corn news, cash corn prices in China were steady in the week ended Wednesday, with prices in Jilin - China's largest corn producing province - little changed from the previous week, sources said.

 

South Korea's Nonghyup Feed Inc., of NOFI bought 55,000 metric tonnes of optional-origin corn from Dreyfus in a tender concluded Tuesday, a company official said Wednesday.

 

South Korea's Korea Corn Processing Association, or Kocopia, purchased 165,000 metric tonnes of optional origin corn from trading firms Cargill and Bungein a tender concluded Wednesday, sources said.

 

Taiwan's Members Feed Industry Group, of MFIG bought 60,000 metric tonnes of U.S. origin corn from Cargill in a tender concluded Wednesday, a source in Taipei said.

 

Corn futures on China's Dalian Commodities Exchange settled lower with the March contract falling RMB24 to RMB1,472/tonne.