November 21, 2005

 

CBOT Corn Outlook on Monday: Steady, searching for direction

  

 

Corn futures at the Chicago Board of Trade are expected to begin open auction trading Monday at steady levels while the market searches for direction, sources said.

 

In overnight e-CBOT trading, December corn gained 1/2 cent to US$1.91 3/4 per bushel, March rose 1/2 cent to US$2.05 3/4, and May also gained 3/4 cent to US$2.14 per bushel.

 

The market usually rallies into a holiday period, said a floor analyst. There is not much fresh news, but people will want to cover their positions before the holiday and it's expected to be a little dry in parts of South America over the next several days. Trading activity should slow as the holiday approaches, he added.

 

Futures will continue to follow the Asian bird flu situation carefully for signs of any impact on demand. On Monday, China reported two new outbreaks of bird flu in poultry. The cases, China's 16th and 17th reported since late October, occurred in Inner Mongolia and in Hubei. China produced 14 billion chickens and other poultry in 2004, according to the Agriculture Ministry.

 

On technical charts, analysts peg first resistance for March corn at US$2.06 1/2, Friday's high and then at US$2.08. First support is pegged at US$2.05, Friday's low and new contract low and then at US$2.04.

 

Cash corn basis bids were unchanged to higher Monday morning. Central Illinois was unchanged to 5 cents over December futures, while St. Louis was also unchanged at 13 cents over December futures.

 

Large non-commercial traders were net short a combined 23,067 corn futures and options on corn futures as of Nov. 15, the Commodity Futures Trading Commission reported Friday.

 

In other corn news, premiums of corn in Asia are expected to slip in the week ahead as demand is expected to decline on bird flu concerns, sources said.

 

South Korea's Nonghyup Feed Inc. (NOFI), purchased 142,000 metric tonnes of feed corn from China late Friday, a Seoul-based trader said. The purchase included two panamax-size cargoes of 52,500 tonnes each and one handy-size cargo of 12,000 tonnes, for February delivery.

 

Corn futures on China's Dalian Commodity Exchange ended mostly lower with the most active September contract down RMB6/tonne to RMB1,272/tonne.

 

Monday morning, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 1000 CDT.