October 2, 2006

 

CBOT Corn Outlook on Monday: Up 4-6 cents on wheat rally, overnight gains

 

 

Chicago Board of Trade corn futures are seen opening 4 to 6 cents higher Monday as spillover strength from wheat and higher prices in overnight trade are expected to support prices, sources said.

 

In overnight e-CBOT trading, December corn advanced 6 3/4 cents to US$2.69 1/4 per bushel and March gained 6 1/2 cents to US$2.81 3/4. e-CBOT volume in December was 9,046 contracts.

 

Corn is following wheat higher, a floor analyst said. EU wheat was sharply higher overnight and French wheat was at record levels, he added.

 

The market could also draw support from commodity fund buying a commission house analyst said. It's the start of the fourth quarter and corn could see some institutional buying as well as some technical buying, he added.

 

The market looks like it wants to continue the rally even with good harvest weather predicted, a floor source said.

 

No significant harvest concerns due to weather are expected over the next 5-7 days in the U.S. Midwest, DTN Meteorologix Weather said.

 

In the western U.S. Midwest, only a few scattered showers are expected over the next several days with temperatures averaging well above normal, Meteorologix Weather said.

 

In the eastern U.S. Midwest, scattered showers and thundershowers with amounts of .10-.50 inch and locally heavier are possible in northern and eastern areas Tuesday or Wednesday, DTN Meteorologix Weather said. Temperatures will average above or well above normal during this period.

 

Large speculative traders boosted their long corn futures and options on futures positions by 23,105 contracts and reduced their short positions by 37,017 and are now net long 178,557 contracts as of Sept. 26, the CFTC reported Friday.

 

Large commercial traders trimmed their long holdings by 3,784 contracts and boosted their short positions by 49,824 contracts and are now net short 57,708 contracts, the CFTC said.

 

On technical charts, December corn made a fresh 2 1/2 month high Friday and the next upside objective for the bulls is closing prices above solid technical resistance at Friday's high of US$2.67 3/4, a market technician said. First support for December corn is seen at US$2.65 and then at US$2.67 3/4. First support is pegged at US$2.60 and then at US$2.57 1/2.

 

Corn basis bids were mixed Monday. Central Illinois was up 2 cents at 3 cents under the December future.

 

In other corn news, China's corn futures markets are closed this week due to a holiday.

 

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