November 14, 2005

 

CBOT Corn Outlook on Monday: Steady to up slightly on follow through

  

 

Corn futures at the Chicago Board of Trade are expected to begin open auction trading steady to slightly higher Monday on follow through from Friday's session. A lack of fresh news will have corn looking to other markets for direction as well, floor sources said.

 

In overnight e-CBOT trading, December corn rose 1 1/4 cents to US$1.96 3/4, March corn gained 1 cent to US$2.10 3/4, and May added on 1 3/4 cents to US$2.19 per bushel.

 

Corn should start steady and then take its direction from the other pits, as there is not much new fundamental news out, a floor analyst said Monday.

 

"The market had good support on Friday and you could see that again today," said Jason Roose, an analyst with US Commodities in West Des Moines, Iowa. Cash prices are cheap and the dollar is still weak so the market could see demand pick up, he said. In addition, most of the corn is in pretty tight hands, with producers in no hurry to sell at these prices, after securing their loan deficiency payments.

 

Traders and analysts expect the corn harvest around 95% in this afternoon's weekly crop progress report. Last week, 90% of the crop was reported harvested.

 

The fact that the market did not sell off following the bearish USDA report on Thursday does strongly suggest that virtually all the bearish news has been factored in the corn market, technical analyst Jim Wyckoff said. He pegs first resistance for March corn at US$2.10, Friday's high and then at US$2.12. First support is seen at Friday's contract low of US$2.07 1/2 and then at US$2.05.

 

Cash corn basis bids were mostly steady Monday morning. Central Illinois was unchanged at 5 cents over December futures, while St. Louis was unchanged at 12 cents over December futures.

 

In other corn news, Ukraine harvested 6.484 million metric tonnes of corn through Nov. 11 on 1.58 million hectares, the Agriculture Ministry announced Monday. The average yield was 4.34 tonnes per hectare.

 

Weaker ocean freight rates and bearish production data are expected to pressure premiums for corn and wheat delivered to Asia, according to Asia-based traders.

 

Philippine corn production declined 2.3% to 4.176 million metric tonnes due to unfavorable weather in the country's major corn-producing areas, the country's Department of Agriculture said.

 

Corn futures on the Dalian Commodity Exchange settled mixed with the most active May contract up RMB2/tonne to RMB1,257/tonne.