September 12, 2006

 

CBOT Corn Outlook on Tuesday: Called 1-3 cents lower after USDA report

  

 

CBOT corn futures are expected to begin trading 1 to 3 cents lower Tuesday, following the release of September production and supply-demand date from the U.S. Department of Agriculture.

 

In overnight e-CBOT trading, September corn fell 1/2 cent to US$2.28 1/4 per bushel and December fell 1 1/2 cents to US$2.42.

 

The USDA estimated U.S. corn production at 11.114 billion bushels above the 10.976 billion in August and the average analyst estimate of 10.996 billion bushels.

 

"The corn number was large and will probably weigh on corn prices," said Brian Hoops of Midwest Marketing in Yankton, S.D. "Corn production (at 11.1 billion bushels) was above expectations and certainly above the average estimate and larger than last year's crop. I'm looking for 2-3 cents lower at the open," he said.

 

2006-07 corn ending stocks were pegged at 1.220 billion bushels, slightly lower than the 1.232 billion estimated by the USDA in August and in line with the average analyst estimate of 1.221 billion bushels. The USDA increased its forecast of export demand by 100 million bushels from the August report.

 

Old crop ending stocks were pegged at 2.012 billion bushels, down 50 million from the 2.062 billion in the August report as the USDA increased exports by 50 million bushels.

 

The USDA left unchanged China's corn production at 138 million metric tonnes.

 

Production increased from last month in Iowa, Illinois, Nebraska and Minnesota, USDA said.

 

It's not that bearish of a report, a floor analyst said. The numbers (production) are larger but the carryout is not that big, he added.

 

On technical charts, look for December corn prices to chop in a trading range for the next few weeks between the contract low of US$2.33 1/2 and solid resistance at US$2.50, a technical analyst said. First resistance for December corn is seen at US$2.44 1/2 and then at US$2.48 1/4. First support is seen at US$2.40 and then at US$2.38 1/4.

 

Deliveries posted against September totaled 2,466 contracts. Large issuers included the customer account of Cunningham Commodities, which issued 395 contracts and the customer account of Dowd Wescott, which issued 230 contracts. Large stoppers included the customer account of Cunningham Commodities, which stopped 379 contracts, and the house account of Shatkin Arbor, which stopped 277 contracts. The last trade date assigned was Sep. 11.

 

Cash corn basis bids were mixed Tuesday. Central Illinois was unchanged at 11 cents under the December.