November 22, 2005

 

CBOT Corn Outlook on Tuesday: Steady to up 1 cent on position squaring

 

 

Corn futures at the Chicago Board of Trade are expected to start trading steady to 1 cent higher Tuesday morning on position evening ahead of the holiday, keeping in line with the tone set overnight, sources said.

 

In overnight e-CBOT trading, December corn rose 3/4 cent to US$1.92 1/4 per bushel, March gained 1 cent to US$2.06 1/4, and May added on 1 1/2 cents to US$2.15 per bushel.

 

The market should benefit from position squaring ahead of the holiday, a floor trader said. Some traders will be beginning their holiday early and will not want to leave an open position. However, there is not much to trade off of this morning, they added.

 

Outside markets might also provide support, a floor analyst said. Energy and precious metals prices were higher.

 

The U.S. and Taiwan have banned poultry imports from the Canadian province of British Columbia after an outbreak of bird flu was reported there.

 

Dry conditions are expected in most South American growing areas Tuesday and Wednesday before scattered precipitation moves into the region, according to DTN Meteorlogix weather.

 

On technical charts, analysts peg first resistance for March corn at US$2.06, Monday's high and then at US$2.08. First support is pegged at Monday's low of US$2.04 3/4 and then at US$2.03.

 

Cash corn basis bids were mixed Tuesday morning. Peoria, Illinois was 2 cents lower at 2 cents over December futures, while St. Louis was 3 cents higher at 16 cents over December futures.

 

Corn futures on China's Dalian Commodity Exchange finished higher with the most active September contract up RMB5/tonne  to RMB1,277/tonne .

 

Tuesday is the last trading day for December corn options and on Wednesday, March corn becomes the lead contract month and the market will close at 12:00 CST (1800 GMT) ahead of the Thanksgiving Day holiday.