November 7, 2005

 

CBOT Corn Outlook on Monday: Weaker on e-CBOT, spillover pressure

 

 

Corn futures at the Chicago Board of Trade are called to open steady to weaker Monday, pressured by a lack of bullish news and weakness seen in other pits.

 

Most-active December is called to open steady to 1 cent weaker.

 

In e-cbot trade, December corn fell 1/2 cent to US$1.95 a bushel.

 

Dale Gustafson, analyst at Citigroup Global Markets in Chicago, expects corn to open about 1/2 cent to 1 cent lower, and he said the market could easily slip into a two-sided trade amid a lack of fresh news to move the market one way or the other.

 

The U.S. corn harvest is expected to be 89% complete as of Sunday, Gustafson said, up from 80% harvested one week ago. The U.S. Department of Agriculture will issue its weekly crop progress report Monday at 3:00 p.m. CST.

 

Thunderstorms moved through the Midwest over the weekend, spawning a deadly tornado near Evansville, Ind., and dropping 0.25-1 inch of rain in some areas of the eastern belt. Temperatures were above to much above normal, private weather firm DTN Meteorlogix said.

 

The western belt is expected to see dry conditions over the next five days, with the possibility of light showers late Tuesday and early Wednesday. Temperatures will remain above to much above normal. The eastern belt will be dry Monday with a few light showers on Tuesday. Scattered showers and storms with 0.10-0.50 inch of rain is expected Wednesday, with dry conditions Thursday and Friday.

 

Meanwhile, technical analyst Jim Wyckoff said that with December corn making new contract lows, bears are still in full technical control. First resistance for December corn is seen at Friday's high of US$1.96 3/4 and then 1.98 1/2, last week's high. First support is seen at the contract low of US$1.95 1/4 and then at US$1.94.

 

According to the Commodity Futures Trading Commission's Commitment of Traders report, funds are net short about 7,000 contracts futures-only and are short nearly 20,000 contracts futures and options combined.

 

Argentina's corn-growing regions are witnessing dry conditions and more rains would be beneficial for corn planting and development, DTN Meteorlogix said. The dry weather is expected to continue through the early part of the week, with temperatures near to above normal.

 

Argentina remains an active seller of its corn crop. On Friday, Argentina sold 11.64 million metric tonnes of 2004-05 (March-February) corn for export, the Agriculture Secretariat said. By this time last year Argentina had sold 8.955 million tonnes.

 

Russia's corn harvest is 68.5% complete, with 2.6 million metric tonnes picked, the Agriculture Ministry said. This is on pace with last year's activity.