October 15, 2007

 

CBOT Corn Outlook on Monday: 3-5 cents higher on outside markets, weak dollar

 

 

Chicago Board of Trade corn futures are predicted to begin day session trading 3 to 5 cents higher Monday after firm prices in overnight trade based on stronger outside markets and a weaker U.S. dollar, analysts said.

 

In overnight electronic trading December corn rose 5 1/4 cents to US$3.56 1/4 per bushel and March gained 4 3/4 cents to US$3.72 1/2. E-CBOT volume in December was 4,976 contracts.

 

Corn was higher in overnight trade on spillover from Friday and the strength in outside markets and the weaker U.S. dollar, a commission house analyst said. Crude oil traded to an all-time high and metals are higher and the grains should benefit from inflationary type buying, the analyst said.

 

The market could see some strength from rainy conditions expected in the U.S. Midwest over the next several days delaying harvest activity and hedge pressure, an analyst said.

 

Rain showers are expected through Tuesday in the western Midwest and redevelop later in the week in the region, DTN Meteorlogix Weather said. Amounts through Tuesday are expected to total 0.25 to 1.00 inch.

 

In the eastern U.S. Midwest widely scattered showers and thundershowers are expected into Tuesday with amounts of 0.25 to 1.00 inch.

 

Temperatures in the west are expected to average near-to-above normal in the western U.S. Midwest and above normal east, Meteorlogix Weather said.

 

Large speculative traders reduced their long CBOT corn futures and options on futures positions by 25,607 contracts and increased their short positions by 10,546 contracts and are now net long 96,126 contracts as of Oct. 9 the CFTC reported Friday in its weekly commitment of traders report. Large commercial traders cut their short futures and options on futures positions by 32,703 contracts and increased their long positions by 13,346 contracts and are now net short 323,491 contracts. Index funds increased their short positions by 3,538 contracts and added 207 contracts to their long positions and are now net long 351,498 contracts, the CFTC said in its supplement to the report.

 

On daily open auction technical charts, December corn closed at a bullish weekly high close and the bulls have regained some upside technical momentum, a technical analyst said. The next upside price objective for market bulls is to push and close prices above solid resistance at US$3.68 which would fill on the upside the big downside price gap on the daily bar chart that was created in early October. The downside price objective for the bears is to close prices below solid support at this month's low of US$3.35.

 

First support is seen at US$3.47 3/4 and then at US$3.45.

 

In other corn news, Asian corn buyers may see cheaper corn prices in the near-term as the current high prices are unlikely to be sustained in the absence of any bullish news, analysts in Asia said.

 

Corn futures on China's Dalian Commodities Exchange settled higher with the May contract up RMB12 at RMB1,651/tonne.

 

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.