September 11, 2006

 

CBOT Corn Outlook on Monday: Called 1-2 cents lower ahead of USDA report

 

 

CBOT corn futures are expected to begin trading 1-2 cents lower Monday, following the weaker tone in overnight activity and ahead of Tuesday's U.S. Department of Agriculture crop production and supply-demand reports, sources said.

 

In overnight e-CBOT trading, September corn declined 2 1/2 cents to US$2.29 1/4 per bushel and December fell 1 3/4 cents to US$2.44 1/4 with e-CBOT December volume of 3,985 contracts.

 

The market isn't expected to move much one way or the other with prices chopping around ahead of the USDA reports Tuesday, a floor analyst said. People will even up their positions and wait on the USDA for market direction, he added.

 

In addition, outside markets are all lower this morning which should also add to the quiet tonnee, he said.

 

In a Dow Jones Newswire survey of 20 analysts the average 2006-07 corn production estimate was 10.996 billion bushels, slightly higher than the USDA's 10.976 billion estimate in August. The average yield estimate was 152.5 bushels per acre, slightly higher than the 152.2 bushels forecast in August.

 

In a Dow Jones survey of 14 analysts, the average of 2006-07 corn ending stocks estimate was 1.221 billion bushels, 11 million lower than the 1.232 estimated by the USDA in the August supply and demand report.

 

The average ending stocks estimate of the 2005-06 crop was 2.046 billion bushels, 16 million bushels below the 2.062 forecast by the USDA in August.

 

The USDA is scheduled to release its September crop production report on Tuesday at 7:30 a.m. CDT.

 

On technical charts, the next upside price objective for December corn is closing prices above solid technical resistance at US$2.50, a technical analyst said. First resistance for December corn is seen at US$2.48 1/4, Friday's high and then at US$2.50. First support is seen at US$2.44 1/2, Friday's low and then at US$2.42.

 

Deliveries posted against September totaled 2,563 contracts. Large issuers included the customer account of Cunningham Commodities, which issued 432 contracts and the customer account of Dowd Wescott, which issued 229 contracts. Large stoppers included the customer account of Cunningham Commodities, which stopped 395 contracts, and the house account of Shatkin Arbor, which stopped 218 contracts. The last trade date assigned was Sept. 8.

 

Large commercial traders reduced their long holdings of CBOT corn futures and options on futures contracts by 12,523 contracts and increased their short positions by 1,103 contracts for the period ending Sept. 5. As a result, large commercial traders are net short 8,828 contracts, the Commodity Futures Trading Commission reported Friday. In addition, large non-commercial traders increased their long positions by 9,072 contracts and reduced their short positions by 4,865 contracts and are now net long 129,234 contracts, the CFTC said.

 

Cash corn basis bids were mixed Monday. Central Illinois was 1 cent lower at 11 cents under the December.

 

In other corn news, prices for corn delivered to Asia may decline in the week ahead on the approaching U.S. harvest, Asian sources said.

 

Monday morning, the USDA is scheduled to release the weekly export inspections report at 10:00 a.m. CDT and the weekly crop conditions report at 3:00 p.m. CDT (2000 GMT).