October 23, 2006

 

CBOT Corn Outlook on Monday: 3-5 cents lower on profit taking, outside markets

 

 

Chicago Board of Trade corn futures are expected to begin trading 3-5c lower Monday as profit taking following weaker prices overnight and lower outside markets are expected to apply pressure to prices at the opening, sources said.

 

In overnight e-CBOT trading, December corn fell 5 cents to US$3.07 3/4 cents per bushel and March declined 5 1/4 cents to US$3.22 3/4. e-CBOT volume in December was 11,388 contracts.

 

The market was lower overnight on the lack of fresh news and profit taking, a commission house analyst said. A lot depends on what the funds want to do but it is near the end of the month and the funds might want to even up some of their positions. In addition, the outside markets are lower this morning and are likely to influence price direction as well, the analyst said.

 

Harvest pressure may surface Monday, a floor source said. Although it rained in the U.S. Midwest over the weekend, the harvest continues and harvest related selling could act as a drag on prices, the source noted.

 

Large speculative traders added 13,234 contracts to their long corn futures and options on futures positions and reduced their short positions by 18,395 contracts and are now long 262,621 contracts as of Oct. 17, the Commodity Futures Trading Commission reported Friday. Large commercial traders increased their short positions by 87,056 contracts while increasing their short positions by 50,844 contracts and are now net short 147,386 contracts, the CFTC said.

 

On technical charts, market bulls have been fading a bit after recent price weakness, a technical analyst said. First resistance for December corn is seen at Friday's contract high of US$3.17 1/2 and then at US$3.21 1/2. First support is seen at US$3.11 1/2 and then at US$3.09 1/2.

 

Corn basis bids were unchanged to higher Monday. Central Illinois was unchanged at 6 cents over the December future.

 

In other corn news, premiums for corn delivered to Asia might ease slightly in the week ahead as CBOT futures have softened a bit, sources in Asia said. The market has absorbed a lot of the good news behind the recent rally, sources added.

 

Ukraine harvested 3.548 million metric tonnes of corn through Friday on 1 million hectares, or 55% of the total area to be harvested, said analysts quoting sources at the Agriculture Ministry.

 

Corn futures at China's Dalian Commodities Exchange settled slightly lower. The May contract slipped RMB/3 to RMB 1,465/tonne.

 

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