July 10, 2006

 

CBOT Corn Outlook on Monday: 1-2 cents higher on e-CBOT, weather outlook

 

 

Corn futures are predicted to start open auction trading 1-2 cents higher Monday, following the tone set in overnight activity and current weather forecasts, sources said.

 

In overnight e-CBOT trading, July corn rose 2 cents to US$2.43 and December corn gained 2 1/4 cents to US$2.68.

 

The market should open up higher on the tone set in the overnight trade and the current weather outlook, a commission house trader said. There is some rain in the near-term forecast, and it is expected to heat up later in the forecast, but there are some questions as to how much rain there is going to be and where the hot temperatures will be, the analyst said. The forecasts remain in conflict, he added.

 

In the western U.S., Midwest scattered showers and thunderstorms, 0.25-0.75 inch and locally heavier through Missouri and southern and eastern Iowa are possible Monday and Tuesday, DTN Meteorologix Weather said. Dry or only a few isolated showers are possible Thursday and Friday.

 

In the 6-to-10 day outlook, temperatures are expected to average above to well above normal and precipitation near to below normal.

 

In the eastern U.S. Midwest, scattered showers and thunderstorms, with amounts of 0.50-1.50 inches and locally heavier are forecast the next 24-48 hours, DTN Meteorologix Weather said. There is a chance for a few additional thundershowers Thursday and Friday.

 

In the 6-to-10 day outlook, Temperatures are expected to average above normal and rainfall near to below normal, DTN Meteorologix Weather said.

 

Large commercial traders increased their short corn futures and options and futures positions by 10,840 contracts and reduced their short positions by 13,890 contracts and are now net short 74,317 contracts as of July 3, the Commodity Futures Trading Commission reported Friday.

 

In addition, large non-commercial traders increased their long positions by 26,025 contracts and added to their short positions by 14,073 contracts and are now net long 159,057 futures and options of futures contracts, the CFTC reported.

 

Deliveries posted against the July contract Monday totaled 2,006 contracts. The customer account of Man Financial issued 567 contracts and stopped 576 contracts and the customer account of Dowd Wescott issued 318 contracts and stopped 334 contracts. Preliminary open interest in July is 8,039 contracts as of Friday.

 

On technical charts, the next upside price objective in December corn for the bulls is closing prices above chart resistance at last week's high of US$2.72, a technical analyst said. First resistance for December corn is seen at US$2.67 1/4, Friday's high and then at US$2.70. First support is seen at US$2.63, Friday's low and then at US$2.62.

 

In other corn news, recent volatile corn futures prices are causing some Asian feed buyers to switch to feed wheat instead, Asian analysts and traders said Monday.

 

Taiwan's Members Feed Industry Group or MFIG, is seeking 56,000-60,000 metric tonnes of U.S. origin corn in a tender to be concluded Thursday, a group official said Monday.

 

Corn futures on China's Dalian Commodities exchange settled lower, with the March down RMB18 at RMB1,430/tonne.

 

Monday morning, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 10:00 a.m. CDT and at 3:00 p.m., the weekly crop progress report.