August 8, 2006

 

CBOT Corn Outlook on Tuesday: Down 2-3 cents on weather, crop conditions

 

 

Corn futures are predicted to begin day-time trading 2 to 3 cents lower Tuesday, following the lower tone established in overnight trading as moderating growing weather and stabilizing crop conditions are expected to weigh on futures, sources said

 

In overnight e-CBOT trading, September corn declined 2 3/4 cents to US$2.37 per bushel and December fell 2 1/2 cents to US$2.54 1/2. Volume in December on e-CBOT overnight was 5,012 contracts.

 

The crop condition ratings are telling us the corn crop has stabilized, said Don Roose, president of US Commodities in West Des Moines, Iowa. Corn is stabilizing at the least and at best corn is adding weight and bushels to the crop.

 

It's tough to talk to positive price-wise when there has been rain almost someplace everyday and temperatures cooler than anticipated. The weather conditions have improved, which should help the crop, he added.

 

Monday afternoon the U.S. Department of Agriculture reported that 57% of the U.S. corn crop was in good-to-excellent condition, one percentage point higher than last week. The percentage of the crop in the dough stage was 44%, above the 5-year average of 36% while 12% of the crop was in the dent stage, slightly above the 5-year average of 10%.

 

Every major state reported improved conditions with the exception of Missouri, which fell 7 percentage points to 47% in the good-to-excellent category. Minnesota gained 8 percentage points to 56% in its good-to-excellent rating.

 

In the western U.S. Midwest, scattered showers and thundershowers with amounts 0.25-0.75 inch are expected Tuesday. Additional scattered thundershowers are expected in the region on Wednesday and Thursday before drier conditions return on Friday.

 

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

 

In the eastern U.S. Midwest, there is a chance for scattered through the rest of the week with amounts of 0.10-0.50 and locally heavier amounts possible.

 

Temperatures are expected to near to below normal Tuesday and near to above normal Wednesday and Thursday, DTN Meteorologix Weather said.

 

In the 6-to-10-day outlook, temperatures are forecast to average near to above-normal with rainfall near to below normal.

 

On technical charts, some damage occurred Monday to suggest a retest of the strong support area of US$2.50 or below, a market technician said. First resistance for December corn is seen at US$2.59 1/4 ad then at US$2.60 1/2. First support is seen at Monday's low of US$2.56 and then at US$2.53 1/2.

 

Cash corn basis bids were mixed Tuesday morning. Central Illinois was unchanged at 14 cents under the September future.

 

In other corn news, the Korea Corn Processing Industry Association, or Kocopia, purchased 110,000 metric tonnes of optional-origin corn from Cargill in a tender concluded Tuesday an association official said.

 

Corn futures on China's Dalian Commodities exchange settled lower with May 2007 down RMB/13 at RMB/1,386/tonne.