CBOT Corn Outlook on Monday: Down slightly as weather remains benign

 

 

Chicago Board of Trade corn futures are expected to open slightly weaker Monday amid continued benign weather and a lack of supportive news, traders said.

 

Corn is called 1 to 2 cents lower. In overnight trading, September corn was down 1 cent to US$3.15 1/4 per bushel and December corn was down 3/4 cent to US$3.26 1/2.

 

With a lack of other news, the market remains focused on the weather, which continues to be bearish, analysts said. Although some dryness is noted in the northwest U.S. corn belt, analyst say that adequate rainfall and mild temperatures are the rule.

 

The weather has fueled expectations of a large crop, potentially with record yields. Analysts said the strong yields could cancel out the effects of any acreage reduction, which the trade is expecting following last week's announcement by the government that it would resurvey acreage in seven states.

 

An analyst said the market does have the potential to move higher thanks to short-covering following Friday's drop.

 

Traders have differing views on Friday's cattle-on-feed report, with some calling it bullish while others say it is bearish. A trader and an analyst also noted wet conditions in Brazil, where the harvest is underway, which could be mildly supportive.

 

Outside markets are providing little direction Monday morning, traders said.

 

Speculative funds have further extended their newfound net short position, the government said.

 

Speculative funds cut 5,157 contracts from their CBOT corn long positions and added 10,507 contracts to their short positions, putting them net short 20,402 contracts, the Commodity Futures Trading Commission said Friday.

 

The supplemental commitment of traders report also showed that commercial funds added 12,514 contracts to their long positions and cut 7,108 contracts from their short positions, putting them net short 167,240 contracts. Index funds added 4,686 contracts to their long positions and added 2,786 contracts to their short positions, putting them net long 315,142 contracts.

 

The corn bulls' next upside price objective is to push prices above solid technical resistance at US$3.56 3/4 a bushel, which would fill on the upside a downside price gap on the daily bar chart, a technical analyst said. The next downside price objective for the bears is to push and close prices below solid technical support at the contract low of US$3.14 3/4 a bushel.

 

First resistance for December corn is seen at US$3.30 and then at US$3.35, the technical analyst said. First support is seen at US$3.20 and then at US$3.14 3/4.