July 18, 2006

 

CBOT Corn Outlook on Tuesday: Up 1/2-1 cent, following overnight trade

 

 

Corn futures are expected to begin pit trading 1/2 to 1 cent higher Tuesday as the market follows the tone established in the overnight session after Monday's declines, sources said.

 

In overnight e-CBOT trading, September corn rose 1/2 cent to US$2.52 1/4 cents per bushel and December also gained 1/2 cent to US$2.68 1/2.

 

Today could be a turnaround Tuesday after Monday's losses, a commission house analyst said. Crop conditions declined slightly but that was expected. However, the forecast is for cooler temperatures but there were scattered rains in parts of the U.S. Midwest overnight, he said. The lack of heat in the latest forecast is not supportive but there is not much moisture in the outlook and the crop could use some rain, he added.

 

The U.S. Department of Agriculture reported that 62% of the U.S. corn crop was in good-to-excellent condition as of July 16, down one percentage point from last week. Traders and analysts had expected a decline in the range of 1-3 points. In Iowa, the largest corn producing state, 68% of the crop was rated in good-to-excellent condition, unchanged from the previous week.

 

In the western U.S. Midwest, there is a chance for a few thunderstorms in parts of the region into Thursday, with temperatures expected to average above to well above normal in this period, DTN Meteorologix Weather said. There is a chance for scattered light showers on Friday with amounts of .10-.50 inch and locally heavier, with the heaviest activity in Missouri and southern Iowa. Temperatures are expected to average near to below normal, DTN Meteorologix Weather said.

 

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

 

In the eastern U.S. Midwest, manly dry weather is expected over the next several days in the region with temperatures above normal early in the period and near to above normal later in the period, DTN Meteorologix Weather said. Scattered showers are forecast Friday into Saturday with the heaviest of these occurring in the south and east.

 

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

 

On technical charts, some near term chart damage was inflicted in December, a technical analyst said. The next upside price objective for corn bulls is closing December futures above chart resistance at the contract high of US$2.75, he added. First resistance is seen at US$2.70, and then at US$2.72. First support is seen at US$2.67 1/4 and then at US$2.65.

 

Cash corn basis bids were unchanged to mostly lower Tuesday morning. Central Illinois was unchanged at 13 cents under the September future.

 

In other corn news, corn futures on China's Dalian Commodities exchange settled mostly lower, with March down RMB/1at RMB/1,425/tonne.