September 24, 2007

 

CBOT Corn Outlook on Monday: 2-3 cents higher on strong wheat, follow-through

 

 

Chicago Board of Trade corn futures are expected to start day session trading 2-to-3 cents higher Monday, underpinned by spillover from an expected higher start in wheat as well as follow-through buying from Friday's strong technical close, analysts said.

 

In overnight electronic trading, December corn gained 3 1/4 cents to US$3.79 3/4 per bushel and March rose 3 3/4 cents to US$3.95 3/4. e-CBOT volume in December was 8,026 contracts.

 

Corn futures should start out higher as the expected stronger start in wheat futures should supply some support, an analyst said. Wheat is expected to open 13-to-15 cents higher on dry weather in Australia over the weekend.

 

In addition, follow-through technical buying from Friday's strong close when December traded above its 200-day moving average should also add to the tonnee, with inflation concerns also supporting the upside, the analyst said.

 

On daily technical charts, December corn closed higher, near the session high and hit a fresh three-month high. Bulls have gained solid upside technical momentum last week and produced a bullish upside "breakout," from the summertime trading range on the daily bar chart, a technical analyst said. The next upside objective for the bulls is to close prices above solid resistance at US$3.82 per bushel. The bears' next target is closing prices below US$3.58 3/4, which would fill on the downside last week's big upside price gap on the daily chart.

 

First resistance for December corn is seen at US$3.77, Friday's high, and then at US$3.80. First support is seen at Friday's low of US$3.71 1/4 and then at US$3.66.

 

Large commercial traders increased their short CBOT corn futures and options on futures positions by 22,348 contracts and decreased their long positions by 5,671 contracts and are now net short 356,550 contracts as of Sept. 18, the Commodity Futures Trading Commission reported Friday. Large speculative traders increased their long futures and options on futures positions by 8,892 contracts and cut their short positions by 6,660 contracts are now net long 117,833 contracts. Index funds increased their long positions by 3,117 contracts and added 579 contracts to their short positions and are now net long 352,956 contracts, the CFTC said.

 

In other corn news, the Buenos Aires Cereals Exchange trimmed its forecast for 2007-08 corn planting by 30,000 hectares to 3.24 million hectares, the exchange said in its weekly crop report Friday.

 

Corn futures on China's Dalian Commodities Exchange settled lower Monday on the government's decision to release some of its stocks of grains to stabilize food prices. The May contract settled down RMB/23 at RMB1,636 per metric tonne.

 

The U.S. Department of Agriculture is scheduled to release the weekly export inspections report Monday at 11:00 a.m. EDT and the weekly crop progress report at 4:00 p.m. EDT.