November 2, 2005

 

CBOT Corn Outlook on Wednesday: Weaker, following overnight trade

  

 

Corn futures at the Chicago Board of Trade are predicted to begin on a slightly weaker note Wednesday, following the tone set in overnight activity, sources said.

 

In overnight e-CBOT trading, December corn declined 3/4 cent to US$1.96 cents per bushel, March corn fell 1 1/4 cents to US$2.09 1/2 per bushel, and May corn also slipped 1 1/4 cents to US$2.18 per bushel. All three contracts dipped to new life-of-contract lows overnight.

 

"Without any positive outside influence, corn looks like it will continue to erode," said John Kleist of Kleist Ag Consulting in Arlington Heights, Ill. It looks like it will continue to grind lower and needs some demand news to stop the recent trend, he added.

 

Tuesday afternoon, private trading firm FC Stone released its estimate of corn production. Stone estimated corn production at 11.079 billion bushels with a yield of 149.0 bushels per acre.

 

Analysts noted that although the figure was higher than the 10.857 billion bushels the U.S. Department of Agriculture estimated in the October production report, given the favorable crop ratings in recent weekly crop progress reports, the figure isn't much of a surprise.

 

Mostly favorable harvest weather is predicted for much of the U.S. Midwest over the next several days, said DTM Meteorlogix weather, allowing farmers to continue to cut their corn crop.

 

On the technical charts, technical analyst Jim Wyckoff pegs first resistance for December corn at US$1.98 1/2, Tuesday's high, and then at US$2.00, this week's high. He pegs first support at US$1.96, and then at US$1.95.

 

Corn futures on China's Dalian Commodity Exchange settled modestly higher Wednesday with the most-active May contract up RMB6/tonne at RMB1,273/tonne.

 

Cash corn prices in China were mostly lower in the week ended Wednesday as the arrival of the new crop to the market and concerns over the spread of bird flu kept prices on the defensive, sources said.

 

Ukraine will likely increase the area planted to corn in 2005-06 to 2.2 -2.5 million hectares from the 1.76 million the previous year, the Ukrainian Deputy Policy Minister said late Tuesday. High domestic prices and seasonal weather problems disrupting winter grains planting are the drivers behind the move.

 

South Korea's Nonghyup Feed Group (NOFI) is seeking to purchase 147,000 metric tonnes of corn, a Korean trader said.