October 1, 2007

 

CBOT Corn Outlook on Monday: Up 1-2 cents on steady e-CBOT trade, higher wheat

 

 

Chicago Board of Trade corn futures are predicted to begin trading 1 to 2 cents higher Monday after posting light gains in overnight trading and spillover from an expected higher start in wheat futures, analysts said.

 

In overnight electronic trading, December corn gained 2 1/4 cents to US$3.75 1/4 per bushel and March also rose 2 1/4 cents to US$3.91 1/2. e-CBOT volume in December was 6,671 contracts.

 

Corn should be modestly higher at the opening on follow through strength from the overnight session as well as spillover from an expected higher opening in wheat futures, an analyst said. Wheat futures are called to open 10 to 12 cents higher.

 

The U.S. corn harvest is thought to have made good progress over the weekend and there could be some hedge-related pressure limiting the upside, a commission house analyst said. However, it is a new month and corn could see some speculative money enter the market based on the weak dollar and continued concerns about inflation, the commission house analyst said.

 

Harvest activity in the U.S. Midwest is expected to continue this week with only occasional disruptions to the harvest, DTN Meteorlogix Weather said.

 

On daily technical charts, December corn closed solidly lower Friday and near the session low as profit-taking weighed on the market following a bearish U.S. Department of Agriculture report, a technical analyst said. No serious chart damage occurred, but follow through selling Monday would start to produce some near-term chart damage.

 

Market bulls' next upside price objective is to close prices above solid resistance at last week's high of US$3.89 1/2. The next downside objective for market bears is closing prices below solid support at US$3.58 3/4, which is the bottom of an upside price gap on daily open auction charts.

 

First resistance for December corn is seen at US$3.76, Friday's high and then at US$3.80. First support is seen at Friday's low of US$3.70 and then at US$3.66.

 

Large speculative traders increased their long CBOT corn futures and options on futures positions by 25,899 contracts and decreased their short positions by 3,005 contracts and are now net long 146,736 contracts as of Sep. 25 the Commodity Futures Trading Commission reported Friday. Large commercial traders boosted their short futures and options on futures positions by 38,664 contracts and cut their long positions by 7,772 contracts are now net short 402,895 contracts. Index funds increased their long positions by 3,414 contracts and trimmed their short positions by 169 contracts and are now net long 356,539 contracts, the CFTC said.

 

In other corn news, South Korea's Nonghyup Feed Inc. bought 45,000 metric tonnes of optional-origin corn in a tender concluded late Friday, a company official said.

 

Argentine corn planting surged last week as producers took advantage of favorable weather and moisture conditions, planting 10% of the 3.95 million hectares estimated to be sown this year, the Agriculture Secretariat reported Friday.

 

Corn futures on China's Dalian Commodities Exchange were closed due to a holiday.

 

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