June 25, 2007

 

CBOT Corn Outlook on Monday: Down 2-4 cents on e-CBOT losses, weak technicals

 

 

Chicago Board of Trade corn futures are expected to start day session trading 2-to-4 cents lower Monday as follow through selling from the overnight session, and a poor technical picture, are expected to weigh on prices at the opening, analysts said.

 

In overnight electronic trading, July corn declined 3 1/4 cents to US$3.64 1/4 per bushel, September fell 3 cents to US$3.93 3/4 and December slipped 3 3/4 cents to US$3.77 3/4. e-CBOT volume in December was 11,361 contracts.

 

Corn was weaker overnight and should be on the defensive, a commission house analyst said. It rained as expected over the weekend and there is some scattered rain over the next several days in parts of the U.S. Midwest. In addition, the market was weak technically last week and corn could see additional weakness Monday on follow through selling, the analyst added.

 

The rain over the weekend relieved some crop stress in parts of the eastern U.S. Midwest and the forecast is for possible scattered rains so recent weather concerns have receded in importance for now, a trader said. The market is looking at the technicals for direction and they have been weak, the trader said.

 

In the western U.S. Midwest mainly dry weather is forecast for Monday with isolated thundershowers for Tuesday, DTN Meteorologix Weather said. Temperatures are expected to average above normal Monday and Tuesday with readings in the upper 80's and low 90's degrees Fahrenheit. There is a chance for scattered showers on Wednesday, Meteorologix Weather said.

 

In the eastern U.S. Midwest, isolated light showers are expected Monday and Tuesday with temperatures averaging near-to-above normal Monday and above normal Tuesday. Scattered light showers are possible Wednesday with amounts 0.10-0.50 and locally heavier, Meteorologix said.

 

In the 6-to-10 day outlook, temperatures are expected to above normal west and near-to-above normal east, with rainfall averaging near-to-mostly below normal.

 

On daily technical charts December corn gapped open lower on the daily bar chart and closed a the weekly low close, a technical analyst said. Bears have gained downside near-term technical momentum as a big V-Top reversal pattern could now be forming on the daily bar chart, the analyst said.

 

The bulls' next upside price objective is closing prices above solid resistance at Friday's downside price objective, meaning pushing prices above US$3.95 per bushel. The bear's next downside objective closing prices below solid chart support at US$3.75.

 

First resistance for December corn is seen at US$3.85 and then at US$3.90. First support is seen Friday's low of US$3.79 and then at US$3.75.

 

Large speculative traders increased their long CBOT corn futures and options on futures positions by 29,224 contracts while cutting their short positions by 2,287 contracts and are now net long 194,027 contracts as of June 19, the Commodity Futures Trading Commission reported Friday. Large commercial traders reduced their long positions by 18,324 contracts and increased their short holdings by 7,568 contracts and are now net short 494,854 contracts, the CFTC said.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled lower with the benchmark January contract down RMB/6 at RMB1,605 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).