September 25, 2006

 

CBOT Corn Outlook on Monday: 1/2-1 cent lower on drier weather

  

 

CBOT corn futures are predicted to start day session trading 1/2 to 1 cent lower Monday as forecasts for drier weather allowing harvest activity to pick up is expected to weigh on prices, sources said.

 

In overnight e-CBOT trading, December corn finished 1 1/2 cents lower at US$2.53 3/4 per bushel and March fell 1 cent to US$2.67 1/2.

 

e-CBOT volume overnight in December was 6,029 contracts.

 

The forecast over the next several days looks clear for harvest activities and this should keep seasonal pressure on the market, a commission house analyst said. There was little fresh fundamental news out over the weekend and outside markets, including energy prices, are lower and this should also limit buying interest, he added.

 

In the western U.S. Midwest, mainly dry weather is forecast for Monday and Tuesday with a chance for light showers Tuesday night into Wednesday, DTN Meteorologix Weather said. Dry weather returns on Thursday.

 

In the eastern U.S. Midwest, it will be mostly dry through Tuesday with light rain on Wednesday with amounts .10-.50 inch. Temperatures will be below normal Monday and near-to-above normal Tuesday and Wednesday, Meteorologix Weather said.

 

Large non-commercial traders increased their long positions by 10,286 contracts while decreasing their short holdings by 7,684 contracts and are now net long 118,433 corn futures and options on futures positions as of Sep. 19, the Commodity Futures Trading Commission said Friday.

 

Large commercial traders reduced their long positions by 18,448 contracts and increased their short positions by 7,730 contracts and are net short 4,100 contracts in the same time frame, the CFTC reported.

 

On technical charts, December corn bulls still have near-term upside technical momentum, but odds are still not high for a strong uptrend to develop heading into the teeth of the U.S. corn harvest, a technical analyst said. First resistance is seen at US$2.57 3/4, Thursday's high and then at US$2.60. First support is pegged at US$2.52, and then at US$2.50.

 

Cash corn basis bids were mixed Monday morning, with Central Illinois unchanged at 5 cents under the December future.

 

In other corn news, corn futures on China's Dalian Commodity Exchange finished lower with the May contract down RMB/9 at RMB1,394/tonne.

 

China exported 5,487 metric tonnes of corn in August, down 99.0 percent and exported 2.262 million tonnes on the year, down 65.7% from the same time last year, China's General Administration of Customs reported Monday.

 

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