November 14, 2006

 

CBOT Corn Outlook on Tuesday: Expected to open flat on thin news

 

 

Chicago Board of Trade corn futures are predicted to start trading little changed Tuesday, in line with Monday's settlement prices as the lack of fresh news and lack of volatility in overnight trading is expected to keep prices near Monday's closing levels sources said.

 

In overnight e-CBOT trading, December corn rose 1/4 cent to US$3.42 3/4 cents per bushel and March also gained 1/4 cent to US$3.58 3/4. e-CBOT volume in December was 6,073 contracts.

 

Corn should open mixed with little clear direction, a commission house analyst said. There was scant news out overnight and the harvest is rapidly coming to a close, which should limit any producer selling, he added.

 

Monday afternoon the U.S. Department of Agriculture reported that 90% of the U.S. corn harvest was complete, within analyst expectations and in line with the five-year average of 90%.

 

The market has been speculative driven and price direction will continue to be determined by the commodity funds, a floor trader said. Without the funds in the market to support it, corn should trend lower, he added.

 

Large commercial traders increased their short corn futures and options on futures positions by 63,137 contracts while increasing their long holdings by 21,525 contracts and are overall net short 179,817 contracts as of Nov. 7, the Commodity Futures Trading Commission reported Monday.

 

Large speculative traders are net long 285,910 contracts, after increasing their long positions by 20,396 contracts while adding 19 contracts to their short positions. The report was delayed due to the Veteran's Day holiday.

 

On day session open auction technical charts, bulls still have the technical advantage in corn but are fading a bit, a technical analyst said. On Monday, December corn closed near the session low and had a bearish "outside day" down on the daily open auction bar chart. The next upside price objective remains 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$3.45 and then at 3.50. First support is pegged at Monday's low of US$3.41 1/2 and then at US$3.39.

 

Cash corn basis bids were mixed Tuesday. Central Illinois was unchanged at 13 cents over the December future.

 

In other corn news, corn futures at China's Dalian Commodities Exchange ended higher on spot market price increases this week, an analyst said. The May contract gained RMB14 to RMB 1,557/tonne.