October 8, 2007

 

CBOT Corn Outlook on Monday: 2-3 cents lower on e-CBOT, harvest progress

 

 

Chicago Board of Trade corn futures are expected to start trading 2-to-3 cents lower Monday, following the weakness in overnight trading and good harvest progress over the weekend, analysts said.

 

In overnight electronic trading, December corn declined 2 3/4 cents to US$3.39 1/2 per bushel and March fell 3 cents to US$3.56. e-CBOT volume in December was 3,498 contracts.

 

Corn should start out to the downside as producers likely made good harvest progress this weekend, an analyst said. The concern is that the U.S. Department of Agriculture will report that the U.S. corn crop got bigger in Friday's crop production report, keeping supply pressure on the market, the analyst said.

 

An expected weaker start in wheat and soybean futures should keep prices on the defensive to start, a trader said. There were some rains in Australian wheat areas this weekend and dry soybean areas of northern Brazil received rains, with both commodities expected to open lower, the trader said.

 

The dollar is higher and the outside markets are lower and that could keep a cap on corn values, a commission house analyst said. In addition, much of the financial world has the day off due to Columbus Day and activity is expected to be light, the commission house analyst said.

 

On daily open auction technical charts, December corn ended steady Friday but did close at a bearish weekly low close, a market technician said. Near-term chart damage has occurred recently to suggest still more downside potential exists in the near term, the technician said. The next downside price objective for market bears remains closing prices below solid support at the September low of US$3.35 1/2. The bulls' next upside price objective remains closing prices above solid resistance at US$3.50.

 

First resistance for December corn is seen at Friday's low of US$3.39 3/4 and then at US$3.35 1/2. First support is seen at US$3.39 3/4, Friday's low and then at US$3.35 1/2.

 

Large commercial firms reduced their short CBOT corn futures and options on futures positions by 27,424 contracts and increased their long positions by 6,020 contracts and are now net short 369,541 contracts as of Oct. 2 the CFTC reported Friday.

 

Large speculative traders increased their short futures and options on futures positions by 11,318 contracts and cut their long positions by 3,141 contracts and are now net long 132,278 contracts. Index funds increased their short positions by 1,775 contracts and added 65 contracts to their long positions and are now net long 354,829 contracts, the CFTC said.

 

In other corn news, China's corn production is estimated at 149 million metric tonnes, unchanged from its September number, China's National Grain and Oils Information Center said Monday. Corn futures on China's Dalian Commodities Exchange closed mostly lower with the May contract unchanged at RMB1,655/tonne.

 

Due to the Columbus Day holiday, the weekly export inspections and crop conditions reports will be released Tuesday.