June 18, 2007

 

CBOT Corn Outlook on Monday: Seen 5-7 cents higher on weather, e-CBOT strength

 

 

Chicago Board of Trade corn futures are forecast to begin trading 5-to-7 cents higher Monday, underpinned by bullish weather forecasts and stronger prices in overnight E-cbot trading, analysts said.

 

In overnight electronic trading, July corn rose 7 1/4 cents to US$4.26 1/4 per bushel, September gained 7 1/2 cents to US$4.33 1/2 and December ended up 7 1/4 cents at US$4.31 1/2. E-CBOT volume in December was 13,980 contracts.

 

The market will be higher to start, an analyst said. The forecast is for spotty rains and until a general rain is received in the U.S. Midwest it will be hard for the market to go lower, he said.

 

Corn should be supported at the start by the weather forecasts and the higher prices in overnight activity, a commission house analyst said. In addition, the market is expecting crop conditions to decline in Monday's crop progress report and corn should also see support from fund and technical buying the analyst said.

 

December corn, which represents the crop that will be harvested this fall, rallied 32 cents last week.

 

In the western U.S. Midwest scattered showers and possible thundershowers are forecast Monday and Tuesday with only a few light showers possible on Wednesday favoring northern areas, DTN Meteorologix Weather said. Rainfall during this period should average 0.10-0.75 inch and locally heavier. Temperatures are expected to average near-to-below normal Tuesday and above normal Wednesday.

 

In the eastern U.S. Midwest, scattered showers are possible with amounts of 0.10-0.50 inch and locally heavier Monday and early Tuesday with mainly dry weather expected Wednesday, Meteorologix Weather said. Temperatures are expected to average near-to-above normal Tuesday and Wednesday.

 

In the 6-to-10 day outlook, temperatures are expected to average above normal. Rainfall is expected to average near-to-above normal northwest, and near-to-below normal elsewhere in the region, Meteorologix Weather said.

 

On daily technical charts July corn closed near the session high and reached another 11-week high Friday, a technical analyst said. Fund buying based on bullish weather forecasts boosted the market, the analyst said. The bulls' next upside price objective remains closing prices above technical resistance at US$4.25 per bushel with the bears next downside objective is closing prices below solid support at US$4.00 per bushel.

 

First resistance is for July corn is seen at Friday's high of US$4.23 1/2 and then at US$4.25. First support is seen at Friday's low of US$4.14 1/2 and then at US$4.10.

 

Large commercial traders increased their short CBOT corn futures and options on futures positions by 10,323 contracts while cutting their long positions by 13,378 contracts and are now net short 468,962 contracts as of June 12, the Commodity Futures Trading Commission reported Friday. Large speculative traders added 5,970 contracts to their long futures and options on futures positions and reduced their short positions by 6,531 contracts and are now net long 162,516 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/12 at RMB1,614 per metric tonne.

 

Monday morning the U.S. Department of Agriculture is scheduled to release the weekly export inspections at 11:00 a.m. EDT and the weekly crop progress report at 4:00 p.m. EDT (2000 GMT).