November 18, 2005

 

CBOT Corn Outlk on Friday: Slightly lower, following overnight trade

 

 

Corn futures at the Chicago Board of Trade are expected to start trading Friday at slightly lower levels, following the tone set in overnight activity, sources said.

 

In e-CBOT trading, December corn fell 1/2 to US$1.91 3/4 per bushel, March lost 1 cent to US$2.05 1/2, and May also declined 1 cent to US$2.14 per bushel. Both December and May made new contract lows in the overnight session.

 

Despite a continued firm cash market, corn futures "should test last year's lows," said Don Roose, president of U.S. Commodities in West Des Moines, Iowa. Corn just continues its recent trend lower, with little current support, he said.

 

Floor analysts noted that China reported two additional cases of bird flu Friday and a weaker opening is expected in soybeans on rainfall overnight in Argentina, both of which could add additional pressure to corn futures this morning.

 

China reported bird flu outbreaks in the northern province of Shanxi and the far northwestern region of Xinjiang, bringing the number of cases reported to 13 since Oct. 19.

 

On technical charts, analysts set first resistance for March corn at US$2.08, and then at US$2.10. First support is pegged at US$2.05 1/2, Thursday's low and new contract low and then at US$2.04.

 

Cash corn basis bids were unchanged to higher Thursday morning as farmers maintain tight ownership of the newly harvested crop. Peoria, Illinois was unchanged at 4 cents over December futures, while St. Louis was 2 cents higher at 13 cents over December futures.

 

In other corn news, South Korea's Nonghyup Feed Inc. (NOFI) is seeking to purchase 142,000 metric tonnes of corn, split into two panamax cargoes of optional origin corn and two handy-size cargoes of Chinese corn, a trader said.

 

Hungary will see a bumper crop of more than 9 million metric tonnes, which raises problems with storage and capacity, agriculture ministry state secretary Fulop Benedek said Friday. Eighty percent of the harvest has been completed of the total planted area with an average yield of 7.7 tonnes per hectare, Benedek said. In addition, a lack of rail cars has nearly crippled Hungary's wheat and corn exports from 300,000 tonnes per month to 150,000 tonnes in November, he said.

 

Ukraine has harvested 7.13 million metric tonnes of corn through Nov. 17 on 1.63 million hectares with an average yield to date of 4.37 tonnes per acre, the agriculture ministry reported Friday.

 

Hebei province in northern China is expected to produce 16.97 million metric tonnes of corn this season, up from 16.35 million tonnes produced in 2004, a Chinese government report said recently. Hebei is one of China's major corn planting provinces, with around 2.68 million hectares planted in 2005, up from 2.63 million hectares last year, the Hebei Prices Bureau said in a report posted on the State Grain Administration web site.

 

Corn futures on China's Dalian Commodity Exchange ended near unchanged with the May contract up RMB2/tonne to RMB1,238/tonne.