August 20, 2007

 

CBOT Corn Outlook on Monday: Flat to down 1 cent; e-CBOT, spillover, rains

 

 

Corn futures on the Chicago Board of Trade are expected to start Monday's day session with a steady to easier feel, in step with the overnight tone, with late season filling rains and spillover from other grains applying pressure, analysts said.

 

Analysts expect corn to open steady to 1 cent lower.

 

In overnight electronic trading, September corn was unchanged at US$3.28 1/2, and December corn was 1/2-cent lower at US$3.45 1/4.

 

A quiet news front is expected to keep corn in the role of a follower, with weaker openings in soybeans and wheat expected to influence price movement, a CBOT floor analyst said.

 

Rains moving through the central U.S. are seen applying some price pressure, but lingering concerns about dryness in parts of the belt during the summer and what effect it has had on yields are seen limiting downside movement, traders said.

 

Meanwhile, attention will still be placed on financial markets, with traders expected to continue to monitor the stability of outside markets before taking on to much risk following last week's volatile activity, traders added.

 

A market technician said bullish traders will have to close December futures above solid resistance at US$3.50 to regain some fresh upside technical momentum. The next downside price objective is closing prices below solid support at the July low of US$3.24 1/2.

 

First resistance for December corn is seen at Friday's high of US$3.46 and then at US$3.50. First support is seen at US$3.40 and then at US$3.36.

 

The DTN Meteorlogix Weather Service forecast said heavier than expected storms occurred in the western and northern Midwest during the weekend. Heavy storms associated with a near stationary cold front have likely caused flooding and some crop lodging in northern Iowa, southern Minnesota and Wisconsin during the weekend. The southern part of the eastern belt may see some beneficial rains Monday before drier and hotter weather returns during the next few days.

 

The Commodity Futures Trading Commission on Friday reported in its supplemental commitment of traders report that index funds were reported to hold net long positions totaling 362,457 combined corn futures and options contracts as of Aug. 14, down from 369,439 the prior week.

 

Traditional large speculative traders were net long 109,669 contracts compared with net longs of 102,253 in the previous week. Commercials were reported to hold net short combined futures and options positions totaling 361,564 contracts, down from the previous week's 371,539 contracts.

 

On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EDT (1500 GMT) and weekly crop progress reports at 4:00 p.m. EDT.

 

In overseas markets, corn futures traded on the Dalian Commodity Exchange settled higher Monday. The benchmark May 2008 contract settled RMB18 higher at RMB1,574/tonne.