June 19, 2006

 

CBOT Corn Outlook on Monday: Down 3-5 cents on favorable U.S. weather

 

 

Corn futures at the Chicago Board of Trade are expected to begin open outcry trading 3-5 cents lower Monday as rainfall over the weekend in drier areas of the U.S. Midwest and near term forecasts for additional moisture are expected to pressure prices, sources said.

 

In overnight e-CBOT trading, July corn fell 4 1/4 cents to US$2.31 1/4 per bushel and December also declined 4 1/4 cents to US$2.57.

 

There was rain in some of the drier areas of the western U.S. Midwest and there are more showers anticipated, a commission house analyst said. The areas that needed rain got some, so the markets will be under pressure, with people taking some premium out, a floor analyst noted. In addition, lower outside markets are limiting some buying enthusiasm, he added.

 

In the western U.S. Midwest, there is a chance for scattered showers and thunderstorms with amounts of .25-.75 inch and locally heavier on Tuesday and Wednesday, DTN Meteorologix Weather said. Additional rain is possible Thursday and Friday with temperatures predicted near to above normal Tuesday and near to below normal Wednesday.

 

In the eastern U.S. Midwest, there is a chance for scattered or widely scattered thundershowers, with amounts of .10-.50 inch and locally heavier Tuesday and Wednesday, with temperatures predicted to average near to above normal, DTN Meteorologix Weather said. Scattered showers and thundershowers are possible Thursday and Friday favoring southern and eastern areas of the region, DTN Meteorologix Weather said.

 

Large non-commercial traders reduced their long corn futures and options on futures positions by 30,501 contracts and increased their short holding by 6,713 contracts as of June 12 and are now net long 225,914 contracts, the Commodity Futures Trading Commission reported Friday.

 

In the same period, large commercial traders reduced their short corn futures and options positions by 35,461 contracts and decreased their long positions by 2,443 contracts and are now net short 121,160 contracts, the CFTC reported.

 

Cash corn basis bids were unchanged to mostly higher with Central Illinois unchanged at 2 cents under the July.

 

On technical charts, the next downside price in July is closing prices below chart support at the March low of US$2.27 3/4, a technical analyst said. It will take a close above resistance at US$2.40 to provide the bulls with some fresh upside technical momentum, he noted. First resistance for July corn is seen at US$2.36 1/2, Friday's high and then at US$2.38 3/4. First support is seen at US$2.33 3/4, and then at US$2.32.

 

In other corn news, cash prices of corn delivered to Asia may swing higher or lower in the week ahead depending upon weather conditions for U.S. corn Asian sources said.

 

Corn futures on China's Dalian Commodities Exchange settled lower on long liquidation amid losses in other commodities, an analyst said. The March contract declined RMB8 to RMB1,468/tonne.

 

Monday morning the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 10:00 a.m. CDT.