November 12, 2007

CBOT Corn Outlook on Monday: Down 4-5 cents; following weaker outside markets

Chicago Board of Trade corn futures are expected to start trading 4-to-5 cents lower Monday, following the losses set in outside inflationary markets and weaker prices in overnight activity, analysts said.

In overnight electronic trading, December corn fell 5 1/2 cents to US$3.81 1/4 per bushel and March dropped 6 1/4 cents to US$3.97 3/4. e-CBOT volume in December was 6,365 contracts.

Corn was weaker overnight as the outside markets were all lower and should continue to follow them in day session trading, a commission house analyst said. Crude oil, silver and gold are all weaker and the dollar is higher versus some currencies, also a negative for grain prices, the analyst added.

The market should open on the defensive with not much to trade off of except the inflationary markets, a trader said. The government is closed for Veteran's Day and there won't be any reports to trade off of and it should be a quiet session, the floor trader said.

On daily open auction technical charts, December corn closed lower Friday but nearer the session high. Corn will continue to closely follow crude oil and gold and has a four-week old uptrend line in place, a technical analyst said. The bulls' next upside price objective is to close prices above solid technical resistance at US$3.90 1/2, last week's high. The next downside price objective for the bears is to push prices below solid support at US$3.77 1/2, which would fill on the downside this week's upside price gap on the daily chart.

First resistance is seen at US$3.89, Friday's high and then at US$3.90 1/2. First support is seen at US$3.82 and then at US$3.80 1/2.

Large commercial traders increased their short CBOT corn futures and options on futures positions by 43,854 contracts and increased their long positions by 5,965 contracts and are now net short 408,486 contracts as of Nov. 6, the CFTC reported Friday in the commitment of traders' supplemental report. Large speculative traders increased their long futures and options on positions by 32,891 and trimmed their short holdings by 544 contracts and are now net long 159,024 contracts. Index funds trimmed their long positions by 28 contracts and cut their short positions by 1,146 contracts and are net long 359,578 contracts, the CFTC said.

In other corn news, China exported 210,000 metric tonnes of corn in October, up from the 73,467 tonnes in the same period last year, according to preliminary data from the country's General Administration of Customs. In the first 10 months of the year, exports totaled 4.75 million tonnes, well above the 2.37 million last year, according to the data.

Corn futures on China's Dalian Commodities Exchange settled slightly higher with the benchmark May contract up RMB2 to RMB1,776/tonne.