October 30, 2006

 

CBOT Corn Outlook on Monday: Mixed following overnight trade

  

 

Chicago Board of Trade corn futures are forecast to open mixed Monday as the lack of direction in overnight trade and the absence of fresh news is expected to limit price direction at the open, sources said.

 

In overnight e-CBOT trading, December corn slipped 1/2 cent to US$3.32 cents per bushel and March ended unchanged at US$3.44 1/2. e-CBOT volume in December was 6,196 contracts.

 

The lack of fresh news should limit corn price volatility, a floor analyst said. However, a stronger start in soybean futures could provide support for corn, he added.

 

In overnight trade, January soybeans rose 4 1/2 cents to US$6.53 1/2.

 

It appears that good harvest progress occurred in some areas of the U.S. Midwest over the weekend, and the near-term forecast is favorable to additional harvesting, he noted.

 

In the western U.S. Midwest, mainly dry conditions are expected through Wednesday with only a slight chance for a few light showers on Monday, DTN Meteorologix Weather said.

 

In the eastern U.S. Midwest dry weather is expected on Monday with a chance for a few light sprinkles Monday night into Tuesday. Mainly dry weather is expected from Wednesday through Friday, DTN Meteorologix Weather said.

 

Large speculative traders increased their long corn futures and options on futures by 11,622 contracts and reduced their short positions by 11,128 contracts and are now net long 285,370 contracts as of Oct. 24, the Commodity Futures Trading Commission reported Friday. Large commercial traders boosted their short positions by 40,299 contracts while increasing their long positions by 20,517 contracts and are now net short 167,169 contracts, the CFTC said.

 

On day session open auction technical charts, the bulls are still in strong technical control and their next upside price objective is closing prices in December corn above longer-term technical resistance at US$3.50 per bushel, a technical analyst said. The bears' next near-term downside price objective is closing prices below solid support at US$3.15. First resistance for December corn is seen at Friday's contract high of US$3.34 and then at US$3.38. First support is seen at US$3.27 1/2, and then at US$3.25.

 

Cash corn basis bids were mixed Monday. Central Illinois was up 4 cents at 10 cents over the December future.

 

In other corn news, Ukraine harvested 4.577 million metric tonnes of corn to Oct. 30 on 1.26 million hectares, 71% of the total area to be harvested, the APK-Inform market analyst reported Monday, quoting a source in the agriculture ministry. In August the ministry said that the country's plans to harvest 8 million tonnes this year was disrupted by poor weather and this year's harvest wasn't likely to exceed 6.0 to 6.5 million tonnes.

 

Prices of corn delivered to Asia may rise in the week ahead as CBOT futures still have the potential for further gains, sources in Asia said.

 

Strong demand for corn from ethanol producers in the U.S. is expected to continue to support prices, they added.

 

China exported 6,798 metric tonnes of corn in September, down 98.7% from last year and 2,269,541 million tonnes in the Jan.-Sep. period, down 68.2% on the year, according to data released from China's General Administration of Customs.

 

Corn futures at China's Dalian Commodities Exchange ended mostly lower. The May contract fell RMB/3 to RMB 1,479/tonne.

 

Monday morning the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 11:00 a.m. EST.