November 1, 2005

 

CBOT Corn Outlook on Tuesday: Steady to slightly higher, consolidating

 

 

Corn futures at the Chicago Board of Trade are expected to start Tuesday's pit traded session steady to slightly higher as the market consolidates after recent price weakness and ahead of next week's crop production and supply/demand reports, sources said.

 

In overnight e-CBOT trading, December corn rose 1/4 cent to US$1.96 1/2 cents per bushel, March corn was unchanged at US$2.10 1/4 per bushel, and May corn was also unchanged at US$2.18 3/4 per bushel.

 

"The market is getting comfortable with the harvest at these price levels," said Don Roose, president of U.S. Commodities in West Des Moines, Iowa. Movement is slowing down, and basis levels appear to be holding here, he said.

 

"Corn has been down for 7 days in a row and it might be due for a temporary bounce," a floor analyst said.

 

December corn has made new life of contract lows for seven straight trading sessions.

 

Spillover strength from other row crops may also add some support, with soybean futures called to open 1-3 cents higher.

 

Dry conditions are forecast in much of the western U.S. Midwest over the next several days with drier weather expected in the eastern sections of the region after Tuesday, according to DTN Meteorlogix weather, allowing the harvest to continue without any significant delays.

 

Eighty percent of the U.S. corn crop has been harvested through Sunday according to the U.S. Department of Agriculture. This is above the 64% gathered in 2004 and the five-year average of 74%.

 

Several key states reported good progress. Illinois reported 94% of the crop had been harvested, with Iowa at 80% and Nebraska reporting 79% of the crop had been harvested.

 

Harvest is nearing completion in the Corn Belt and talk of big piles of corn outside of elevators is providing a bearish back-drop for the market, said technical analyst Jim Wyckoff. He sets first resistance for December corn at US$1.97 - Monday's high - and then at US$2.00, this week's high. He pegs first support at US$1.96, the contract low and then at US$1.95.

 

Corn futures on China's Dalian Commodity Exchange settled slightly higher Tuesday with the most-active January contract up RMB2/tonne at RMB1,228/tonne.

 

Late this afternoon private trading firm FC Stone will release its latest estimates of crop production and yields.