November 15, 2005

 

CBOT Corn Outlook on Tuesday: Steady to up 1 cent, keeping overnight tone

 

 

Corn futures at the Chicago Board of Trade are called to open steady to 1 cent higher Tuesday, following the tone set in overnight electronic activity in the absence of other fresh news, sources said.

 

In overnight e-CBOT trading, December corn gained 3/4 cent to US$1.97 1/2, March corn rose 1/2 cent to US$2.11 1/4, and May increased 1/4 cent to US$2.18 3/4 per bushel.

 

"The market is due for a post harvest season bounce," said Vic Lespinasse, of A.G. Edwards and Sons.

 

In Monday's crop progress report, the U.S. Department of Agriculture reported that 95% of the U.S. corn crop had been harvested, above the 85% collected last year and the 5-year average of 91%.

 

Concerns over the pace of export sales and the recent rally in the U.S. dollar could weigh on price direction, sources said. A stronger dollar makes the price of U.S. commodities higher to foreign buyers.

 

December corn needs to get through the US$2 level, added Lespinasse. Monday, it reached US$1.99 1/2 but could not trade higher, despite good fund buying, he said. Commodity fund buying was estimated at 7,000 contracts in Monday's session.

 

It will take a solid close back above solid resistance at US$2.15 in March corn to give the bulls better confidence that a major low is in place, said technical analyst Jim Wyckoff. He pegs first resistance in March corn at US$2.13 1/4, Monday's high and then at US$2.15. First support is seen at Monday's low of US$2.09 3/4 and then at US$2.07 1/2, the contract low.

 

Cash corn basis bids were unchanged to mostly higher Tuesday morning. Central Illinois was unchanged at 5 cents over December futures, while St. Louis was 4 cents lower at 8 cents over December futures.

 

In other corn news, Egypt is looking to purchase 1.3 million metric tonnes of domestically produced corn from the 2005-06 harvest that began in September, a government-owned newspaper reported Tuesday.

 

Egypt's total corn consumption for the 2004-05 season was estimated at 9.88 million metric tonnes, with the country's total corn imports for 2004-05 expected to increase by 5%. The country imported 1.66 million metric tonnes from October 2004 through January 2005, with more than 1.4 million tonnes of U.S. origin.

 

Corn futures on the Dalian Commodity Exchange ended lower with the most active May contract down RMB3/tonne to RMB1,254/tonne.