October 31, 2006

 

CBOT Corn Outlook on Tuesday: Lower start on e-CBOT, profit taking

 

 

Chicago Board of Trade corn futures are expected to begin Tuesday's daytime trading 3-5 cents lower, following overnight weakness with month end profit taking also expected to weigh on the market, floor sources said.

 

In overnight e-CBOT trading, December corn fell 5 cents to US$3.24 1/2 cents per bushel and March declined 5 1/4 cents to US$3.37 3/4. e-CBOT volume in December was 9,837 contracts.

 

Corn was weaker overnight on month end profit taking and could see additional weakness at the opening on follow through selling, a floor source said.

 

The market could be weaker as there has been a pick-up in farmer selling as newly harvested supplies become available, an analyst said. Monday's crop progress report revealed solid harvest activity with this week's weather forecast favorable for additional harvesting, he noted

 

The U.S. Department of Agriculture reported that 68% of the U.S. corn crop was harvested as of Sunday, Oct. 29, up from the 53% combined the previous week. In 2005, 78% of the crop was cut on this date with the five-year average at 71%.

 

In the key state of Iowa, 67% of the crop was harvested, compared to 77% last year and the five-year average of 68%. In Illinois, 83% of the crop has been combined, compared to the five-year average of 85%.

 

Corn has rallied sharply during the month and could see some profit taking before the month is over from professional trading firms, a floor trader said.

 

December corn has gained 67 cents from its closing price in September through Monday's settlement price.

 

On day session open auction technical charts, the bulls are still technically strong and their next upside price objective is closing prices above longer-term technical resistance at US$3.35 1/4 per bushel. 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 US$3.34 and then at US$3.35 1/4. First support is seen at US$3.27 1/4, and then at US$3.25.

 

Cash corn basis bids were mostly lower Tuesday. Central, Illinois was unchanged at 10 cents over the December future.

 

In other corn news, South Korea's Nonghyup Feed Inc. is seeking up to 250,000 metric tonnes of corn in a tender to be concluded late Tuesday, a company official said.

 

Corn futures at China's Dalian Commodities Exchange settled lower. The May contract slipped RMB/1 to RMB 1,478/tonne.