July 17, 2006

 

CBOT Corn Outlook on Monday: Seen 1-2 cents lower on weather forecasts

 

 

Corn futures are expected to start open auction trading 1-to-2 cents lower Monday on weaker overnight prices with some forecast models increases the prospects of rain in parts of the U.S. Midwest in the near term, sources

 

In overnight e-CBOT trading, September corn declined 2 3/4 cents to US$2.58 per bushel and December fell 3 cents to US$2.73 3/4.

 

Although it remains hot, there are some forecasts predicting the possibility of rain in parts of the U.S. Midwest over the next several days and temperatures, while some forecasts don't have the heat as intense and as long as expected earlier, a floor analyst said.

 

In the western U.S. Midwest, dry or only a few isolated showers are expected in the north and east over the next several days, DTN Meteorologix Weather said. Temperatures are expected to average above to much above normal in the period with highs in the upper 80's to low 100 degrees Fahrenheit in the period.

 

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

 

In the eastern U.S. Midwest, there is a chance for scattered thunderstorms in the northeast and northeast areas Tuesday and Wednesday with the balance of the region mostly dry, DTN Meteorologix Weather said. Temperatures should average above to much above normal through Wednesday in most sections of the region.

 

In the 6-to-10 day outlook, Temperatures are forecast to average above to much above normal early in the south and near to above normal north. Rainfall is expected near to below normal, DTN Meteorologix Weather said.

 

Large non-commercial traders increased their long corn futures and options on futures positions by 7,169 contracts and decreased their short positions by 22,519 contracts and are now low 189,746 contracts as of July 14, the Commodity Futures Trading Commission reported Friday.

 

In addition large commercial traders increased their short positions by 31,714 contracts and are now net short 98,198 contracts, the CFTC reported.

 

On technical charts, the next major upside price objective for corn bulls is closing December futures above solid chart resistance at the contract high of US$2.87 1/4, a technical analyst said. First resistance is seen at US$2.79 1/4, Friday's high and then at US$2.81. First support is pegged at Friday's low of US$2.74 1/4 and then at US$2.72.

 

In other corn news, corn prices may rise in Asia this week led by ideas of continued gains in corn futures on the Chicago Board of Trade sources said.

 

A Chinese company plans to import over 1,000 metric tonnes of genetically modified corn from the U.S. in September to be used as animal feed, a company official said.

 

The government allowed genetically modified corn to be imported for the first time in May and decides each GMO import on a case-by-case basis.

 

Corn futures on China's Dalian Commodities exchange settled higher, with March up RMB7 at RMB1,426/tonne.

 

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