November 13, 2006

 

CBOT Corn Outlook on Monday: Called 5-7 cents higher, following e-CBOT

 

 

Chicago Board of Trade corn futures are expected to begin day-session trading 5 to 7 cents higher Monday, following gains in overnight trading in the absence of fresh fundamental news, floor sources said.

 

In overnight e-CBOT trading, December corn gained 6 3/4 cents to US$3.50 per bushel and March rose 7 cents to US$3.66 1/2. E-CBOT volume in December was 8,468 contracts.

 

The corn market will be higher to start based on overnight prices, a floor analyst said. People decided to buy it overnight despite the absence of fresh fundamental news, he added.

 

Corn looks like it will start higher as the market looks to bounce after two days of losses, a floor trader said. There is not much news out overnight but if the funds want to buy it, the market will go higher, he added.

 

After trading as high as US$3.67 cents per bushel earlier last week December corn ended Friday at US$3.43 1/4.

 

On day session open auction technical charts, bulls still have the technical advantage in corn, a market technician said. The next upside price objective is closing prices above technical resistance at US$3.50 per bushel. The bears' next near-term downside price objective is closing prices below solid support at US$3.34, which would fill on the downside a big upside price gap on the daily bar chart.

 

First resistance for December corn is seen at US$3.34 and then at Friday's high of 3.48 1/2. First support is pegged at Friday's low of US$3.42 1/4 and then at US$3.40.

 

Cash corn basis bids were unchanged to higher Monday. Central Illinois was unchanged at 13 cents over the December future.

 

In other corn news, China's new corn export quotas released last week are not expected to impact the market substantially, the country's National Grain and Oil Trade Center said Monday.

 

The National Development and Reform Commission, the country's top economic planning agency, issued 4-million metric tonne corn export National Development and Reform Commission issued 4-million metric tonnes of corn export quotas last week.

 

The release of new corn export quotas will have a very limited impact on the market with most of the recent corn sales consisting of old-crop supplies, said an analyst on the Center's Web site.

 

Premiums of corn delivered to Asia may remain unchanged in the week ahead as Asian analysts believe that CBOT futures may be consolidating after postings gains since the beginning of the fall.

 

Corn production in the Philippines was up 15.71% in the January-September period due to favorable weather conditions, a senior Philippine agricultural official said.

 

Corn production in the period was 4.83 million metric tonnes and is expected to reach 6.14 million tonnes on the year, up 17% from last year's production.

 

Corn futures at China's Dalian Commodities Exchange ended sharply higher on spillover from stronger CBOT prices, an analyst said. The May contract rallied RMB/32 to RMB 1,543/tonne.

 

The CBOT announced that it is raising margin levels on corn futures as of the close of business on Monday, Nov. 13.

 

Monday, the weekly export inspections report is scheduled for release at 10 a.m. CST and the weekly crop progress report is due out at 3 p.m. CST.

 

The Commodity Futures Trading Commission is scheduled to release the commitment of traders report for the period ending Nov. 7 after the close. The report was delayed a day due to the holiday.