November 9, 2005

 

CBOT Corn Outlook on Wednesday: 1/2-1 cent lower on e-CBOT, spillover

  

 

Traders and analysts expect corn futures at the Chicago Board of Trade to open 1/2 cent to 1 cent a bushel lower Wednesday on slight overnight losses and spillover pressure from expected weak soybean futures.

 

In e-cbot trade, December corn closed 1/4 cent lower at US$1.95 a bushel.

 

Trade is expected to remain quiet ahead of Thursday's release of the U.S. Department of Agriculture's November crop production and supply/demand tables.

 

The government is expected to nudge corn production up to 10.965 billion bushels on average, from 10.857 billion in October, according to a Dow Jones Newswires survey. U.S. carryout is seen at 2.281 billion bushels, from 2.22 billion estimated in October.

 

However, most traders and analysts are looking only for small changes this late in the year and with over 90% of the corn crop in the bin.

 

Mostly dry weather through Friday will boost harvest progress into its final stages in many areas. However, scattered showers and thunderstorms are expected to develop Saturday and will end Sunday, bringing 0.10-0.50 inch of rain and locally heavier amounts, private weather forecaster DTN Meteorlogix said.

 

In the eastern belt, mostly dry conditions with a few lingering showers are expected Wednesday, while dry conditions are seen Thursday through Saturday. Scattered showers and thunderstorms are expected late Saturday into Sunday, with rain totals of 0.10-0.50 inch and locally heavier amounts.

 

In news, the Philippines is seeking 100,000 metric tonnes of corn for December or January shipment.

 

Taiwan is expected to tender Thursday for up to 60,000 tonnes of U.S. NO. 2 yellow corn for shipment Dec. 17-31 from the U.S. Gulf or Jan. 1-15 from the Pacific Northwest.

 

China's corn prices fell slightly in the week to Wednesday, extending mild declines from the previous week on bird flu concerns. Recent outbreaks of bird flu in poultry flocks in at least four provinces have hurt the poultry sector and weakened demand for poultry feed.

 

Also, recent bird flu cases in northeastern Japan poultry flocks are likely unrelated to the deadly H5N1 strain that has been found in Southeast Asia since 2003, a Tokyo government official said Wednesday. Officials detected signs of the H5N2 virus, which is considered far less dangerous than the H5N1 strain.

 

The French state grains board, the Office National Interprofessionel des Cereales, or ONIC, estimated the 2005-06 corn crop at 13.992 million tonnes, up from October's 13.862 million-tonne estimate but down from 16.627 million one year ago.

 

Technically, December corn finds first resistance at Tuesday's US$1.95 3/4 high, then US$1.98 1/2. First support is seen at Monday's contract low of US$1.94 1/4, then US$1.93, analyst Jim Wyckoff noted.

 

"It's been quite a while since there have been so many days in a row of small trading ranges. This does suggest a market low is close at hand," Wyckoff said.