July 25, 2006

CBOT Corn Outlook on Tuesday: 3-5 cents higher on weather, crop conditions

Corn futures at the Chicago Board of Trade are predicted to begin open auction trading 3-5 cents higher Tuesday, floor sources said.

A slip in crop conditions and warm, dry weather forecasts are expected to support the market, an analyst said.

U.S. corn conditions declined 3 percentage points in the weekly U.S. Department of Agriculture crop condition ratings released Monday afternoon. Fund buying is likely to mark the trading session, he noted.

In overnight e-CBOT trading, September corn rose 3 1/2 cents to US$2.42 1/2 per bushel and December ended 3 3/4 cents higher at US$2.59.

On technical charts, last week's low of US$2.51 is now strong technical support. The next major near-term downside price objective is the June low of US$2.47 3/4. The next upside price objective is closing prices above chart resistance at US$2.60. First resistance for December corn is seen at US$2.57 1/4-the top of last week's downside price gap on the daily bar chart-and then at US$2.60. First support is seen at US$2.53 3/4-Monday's low-and then at US$2.51.

Near term weather conditions predict heat this week into next week, an analyst noted.

In the western U.S. Midwest, widely scattered light precipitation is expected Monday and Wednesday, remaining dry through the rest of the week, DTN Meteorologix Weather said. Temperatures are expected to average above to well above normal through Saturday.

In the 6-10 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, weather is predicted to be mainly dry with a few possible light showers in the northwest Tuesday, and scattered to widely scattered light showers during Wednesday into Thursday, DTN Meteorologix Weather said. Temperatures are expected to be near to above normal through the rest of the week, with temperatures in the upper-80s to mid- to upper-90s Friday and Saturday.

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

In overseas trade, corn futures settled lower on China's Dalian Commodity Exchange Tuesday. The most widely held March 2007 contract settled at RMB1,383/tonne, up RMB1.