June 26, 2006

 

CBOT Corn Outlook on Monday: 3-4 cents lower on weather forecast

 

 

Corn futures at the Chicago Board of Trade are expected to start pit trading 3-4 cents lower Monday, following the tonnee set in overnight trade and non-threatening weather forecasts, sources said.

 

In overnight e-CBOT trading, July corn fell 4 1/4 cents to US$2.24 per bushel, and December declined 4 cents to US$2.51 1/4.

 

There is no heat in the forecast, so the weather remains non-threatening to the crop, a floor analyst said.

 

Some places that needed rain received it over the weekend, and the forecast is for mild temperatures and rain for the next several days, a commission house analyst said.

 

The weather continues to limit speculative interest, he added.

 

In the western U.S. Midwest, there is a chance for a few light sprinkles Monday and Tuesday in the central and eastern areas of the region. DTN Meteorologix Weather said. Mainly dry weather is expected on Wednesday. Temperatures are forecast to average below normal in the period.

 

In the eastern U.S. Midwest, periods of light showers with locally heavier amounts are predicted Monday through Wednesday, DTN Meteorologix Weather said. Amounts of .10-.50 inch and locally heavier are possible. Temperatures are forecast to average below normal. Mostly dry conditions with only a few light showers in the east are predicted for Thursday and Friday, DTN Meteorologix Weather said.

 

Large non-commercial traders reduced their net long corn futures and options on futures positions to 171,457 contracts as of June 20, the Commodity Futures Trading Commission reported Friday. Large non-commercial traders cut their long positions by 33,612 contracts and increased their short positions by 20,646 contracts in the period, the CFTC reported.

 

On technical charts, the bears are in control with the next downside price objective for December is closing prices below chart support at the March low of US$2.49 1/4, a technical analyst said. It will take a close above resistance at US$2.70 to provide the bulls with some fresh upside technical momentum, he added. First resistance is seen at US$2.57 1/4, Friday's high and then at last week's high of US$2.60. First support is seen at US$2.54 3/4, Friday's low and then at US$2.53 1/2.

 

In other corn news, China's corn exports in May corn totaled 16,658 metric tonnes, down 97.8% from the same time last year. In addition, China's corn exports are down 25% in the Jan-May period from 2005, according to China's General Administration of Customs.

 

Corn futures on China's Dalian Commodities Exchange settled mixed with the March contract down RMB4 to RMB1,468/tonne.

 

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