August 14, 2006

 

CBOT Corn Outlook on Monday: 2-4 cents lower on follow through, e-CBOT down

 

 

Corn futures are forecast to begin trading Monday 2-4 cents lower following the price weakness in overnight trading and the losses set on Friday, sources said.

 

In overnight e-CBOT trading, September corn declined 3 1/2 cents to US$2.21 1/4 per bushel and December also declined 3 1/2 cents to US$2.38 1/4. Volume in December on e-CBOT overnight was 18,227 contracts.

 

The corn market is still unbalanced and should see some follow through weakness from Friday's losses, said Don Roose, president of US Commodities in West Des Moines, Iowa. The market remains weak technically and the weather remains non-threatening to the crop he added.

 

The market could see continued fund selling, a floor analyst said. The funds were heavy sellers Friday and could be active again. Ideas that crop conditions will improve in this afternoon's crop progress report could also add to the expected weakness, he noted.

 

Large commercial traders cut their short corn futures and options on corn futures positions by 17,512 contracts and are now net short 75,958 contracts as of Aug. 8, the Commodity Futures Trading Commission reported Friday.

 

Large speculative traders trimmed their long futures and options of futures holdings by 6,066 contracts and added 1,735 contracts to their short positions and are now net long 195,118 positions corn futures and options on futures.

 

On technical charts, December corn gapped open lower on daily open auction technical charts and hit a fresh 7 1/2 month low following a bearish U.S. Department of Agriculture report Friday, a technical analyst said. Serious near-term chart damage was inflicted and the bears next downside price objective in December is closing prices below US$2.37 1/2, the contract low, the technician said. First resistance is seen at US$2.45 and then at US$2.47 3/4. First support is pegged at US$2.41 3/4, Friday's low and then at US$2.40.

 

Cash corn basis bids were unchanged to higher Monday morning. Central Illinois was up 1 cent at 16 cents under the September future.

 

In other corn news, prices for corn delivered to Asia are expected to decline in the week ahead as demand for U.S. corn is lukewarm while U.S. corn production is forecast to be a bumper crop, sources in Asia said.

 

Taiwan Sugar Corp. TSC, bought 23,000 metric tonnes of U.S.-origin corn in a tender concluded Friday, a Taipei-based trader said.

 

Corn futures on China's Dalian Commodities exchange finished lower with May 2007 down RMB/9 at RMB/1,383/tonne.

 

Monday morning at 10:00 a.m. CDT, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report and at 3:00 p.m. CDT (2000 GMT), the weekly crop conditions are scheduled for release.