October 16, 2006

 

CBOT Corn Outlook on Monday: 1/2-1 cent lower on lack of fresh inputs

 

 

Chicago Board of Trade corn futures are forecast to begin trading 1/2-to-1 cent lower Monday as the lack of fresh news and profit taking after the recent strong gains are expected to influence price direction, sources said.

 

In overnight e-CBOT trading, December corn slipped 3/4 cent to US$3.13 3/4 cents per bushel and March fell 1 1/4 cents to US$3.22 3/4. e-CBOT volume in December was 14,492 contracts.

 

Corn is looking a little tired and could see some profit taking after the recent strong rally, a commission house analyst said. A lot however, depends on the wheat market and what develops there, he added.

 

Last week, December corn rallied 43 1/2 cents from the previous Friday's close.

 

There isn't much fresh news out and there could be some harvest pressure impacting the market as this week looks favorable for harvest activity, a floor trader said. The funds were big buyers last week and they will be an important factor in any price movement Monday as well, he added.

 

In the western U.S. Midwest there is a chance for light showers on Monday and Tuesday with some possible light rain or snow on Wednesday, DTN Meteorologix Weather said. Mainly dry weather is expected Thursday with temperatures averaging below or much below normal.

 

In the eastern U.S. Midwest, light showers are possible on Monday and Tuesday with heavier amounts in southern sections of the region, Meteorologix Weather said. Temperatures are expected to average near to below normal for the period.

 

Large non-commercial traders cut their short corn futures and options on corn futures positions by 23,448 contracts and added 4,270 contracts to their long holdings and are now net long 230,991 contracts as of Oct. 10, the Commodity Futures Trading Commission reported Friday. Large commercial traders increased their short positions by 31,186 contracts and increased their long positions by 446 contracts and are now net short 111,175 contracts as of Oct. 10, the CFTC said.

 

On technical charts, the market has made a strong run recently and bulls could be getting exhausted on the upside, a technical analyst said. The bulls' next upside price objective is closing prices above sold technical resistance at US$3.25, with the bears' next near-term downside price objective closing prices below solid support at 3.00, the analyst said. First resistance for December corn is seen at Friday's contract high of US$3.17 and then at US$3.20. First support is seen at US$3.10 and then at US$3.05.

 

Corn basis bids were unchanged to lower Monday. Central Illinois was unchanged at 5 cents under the December future.

 

In other corn news, prices for corn delivered to Asia are expected to continue to increase in the week ahead as futures soared last week at the Chicago Board of Trade, sources said.

 

A decline in U.S. corn production in last week's U.S. Department of Agriculture crop production report and ideas that an additional cut may be forthcoming in November have supported futures, they said.

 

Corn futures at China's Dalian Commodities Exchange ended higher on spillover from the CBOT, sources said. The May contract rose RMB/8 to RMB 1,484/tonne.

 

Monday morning at 10:00, the USDA is scheduled to release the weekly export inspections report at 10:00 a.m. CDT and the weekly crop progress at 3:00 p.m. CDT (2000 GMT).