November 5, 2007

 

CBOT Corn Outlook on Monday: Down 2-3 cents, weaker crude oil, stronger dollar

 

 

Chicago Board of Trade corn futures are predicted to begin trading 2-to-3 cents lower Monday as lower crude oil prices and a stronger U.S. dollar are expected to keep prices on the defensive at the opening, a commission house analyst said.

 

In overnight electronic trading December corn fell 3 3/4 cents to US$3.73 1/4 per bushel and March declined 3 cents to US$3.91 1/2. e-CBOT volume in December was 3,809 contracts.

 

The outside markets continue to influence corn prices - energy prices are lower and the dollar is higher which point to a lower opening, an analyst said. In addition there was no follow through buying in overnight trade from Friday's gains which should also keep buying interest limited, the analyst added.

 

There is an absence of fundamental news with participants waiting on Friday's crop production and supply/demand reports to confirm last week's lower production and yield estimates from private firms, a trader said. Until the reports are released trading could be choppy.

 

Weather conducive to remaining U.S. harvest activity is expected over the next several days, DTN Meteorlogix Weather said.

 

In the western U.S. Midwest mainly dry weather is expected through Friday with temperatures averages on either side of normal. In the eastern U.S. Midwest, a few light showers are possible Monday, with dry weather expected the remainder of the week, Meteorlogix weather said. Temperatures over the next several days are expected to average below-normal.

 

On daily open auction technical charts, December corn settled higher and hit a fresh five-week high close and the bulls regained upside technical momentum, a technical analyst said. The outside markets remain a driver of the corn market and corn will closely track those commodities, the analyst said. The bulls' next upside objective is to close prices above solid resistance at the September high of US$3.89 1/2 per bushel. The next downside price objective for the bears is closing prices below solid support at US$3.67, last week's low.

 

First resistance for December corn is seen at Friday's high of US$3.80 3/4 and then at US$3.85. First support is seen at US$3.75 and then at US$3.71.

 

Large commercial traders increased their short CBOT corn futures and options on futures positions by 15,746 contracts and reduced their long positions by 3,297 contracts and are now net short 370,597 contracts as of Oct. 30, the Commodity Futures Trading Commission reported Friday in the commitment of traders' supplemental report. Large speculative traders added 6,683 contracts to their long futures and options on futures positions and cut their short positions by 11,283 contracts and are now net long 125,588 contracts. Index funds increased their long positions by 1,349 contracts and added 215 contracts to their short positions and are net long 358,461 contracts, the CFTC said.

 

In other corn news, the Philippines will import up to 270,000 metric tonnes of corn with end users looking for delivery of 70,000 tonnes in December and 200,000 tonnes in January and February, said an assistant agriculture secretary.

 

Corn futures on China's Dalian Commodities Exchange settled higher on fund buying with the benchmark May contract up RMB28 to RMB1,753/tonne.

 

Monday the U.S. Department of Agriculture is scheduled to release the weekly crop progress at 1100 EST and the weekly crop progress at 1600 EST.