November 7, 2006

 

CBOT Corn Outlook on Tuesday: Slightly lower start expected

 

 

Chicago Board of Trade corn futures are forecast to begin Tuesday's daytime trading session 1/2 to 1 cent lower following slightly weaker prices overnight as the market is expected to consolidate ahead of Thursday's U.S. Department of Agriculture reports, sources said.

 

In overnight e-CBOT trading, December corn slipped 1/2 cent to US$3.43 cents per bushel and March fell 1 cent to US$3.57 1/2. e-CBOT volume in December was 4,402 contracts.

 

Corn should see a two-sided session as the market consolidates and waits on Thursday's USDA reports, a commission house analyst says.

 

In a survey conducted by Dow Jones Newswires, the average of 21 analysts' estimates forecast 2006-07 corn production at 10.838 billion bushels, 67 million bushels below the USDA October estimate.

 

The average estimate of the crop's yield by 20 analysts was pegged at 152.5 bushels per acre, below the 153.5 forecast by the USDA in October.

 

The average of 15 analysts estimate 2006-07 ending stocks at 912 million bushels, 84 million bushels below the 996 million estimated in October by the USDA.

 

Monday afternoon's crop progress report is expected to have little impact. The USDA reported that 81% of the U.S. corn crop was harvested as of Sunday, Nov. 5, compared to 88% last year and the five-year average of 82%.

 

Analysts had expected harvest progress between 80%-83%.

 

In Iowa, 84% of the crop has been combined versus 89% last year and the five-year average of 83%. In Neb., 73% of the crop has been combined compared to 87% in 2005 and the five-year average of 79%. Nebraska is the third largest U.S. corn producing state.

 

On day session open auction technical charts, the market is in a pause mode after recent big gains, a market technician said. It's still all about the funds in the grain markets, he added. First resistance for December corn is seen at Monday's high of US$3.45 1/2 and then at US$3.48. First support is seen at US$3.39 1/4, and then at US$3.34, the bottom of last week's big upside price gap on the daily chart.

 

Cash corn basis bids were mixed Tuesday. Central, Illinois was up 1 cent at 11 cents over the December future.

 

In other corn news, corn prices in China continued to fall in October as new crop supplies entered the market and pressured prices, according to the China National Grains and Oils Information Center Tuesday.

 

Prices were stable in early November with demand showing signs of recovery, sources said.

 

Corn futures at China's Dalian Commodities Exchange ended higher. The May contract gained RMB/15 to RMB 1,509/tonne.