November 28, 2005

 

CBOT Corn Outlook on Monday: Slightly lower, following soybeans

 

 

Corn futures at the Chicago Board of Trade are called to open 1 cent lower Monday as the lack of fresh positive news and spillover weakness from soybeans are expected to keep prices on the defensive, traders said. Soybean futures are called to open 7-9 cents lower.

 

In overnight e-CBOT trading, December corn ended 1 cent lower at US$1.88 3/4 per bushel, March fell 1 cent to US$2.01 3/4, a new life of contract low, and May also ended off 1 cent at US$2.10 1/4 per bushel.

 

There is a general negative sentiment in the market right now with few fundamental reasons to buy corn at this time, said Shawn McCambridge, senior grain analyst with Prudential Financial. Right now buyers will likely stay on the sidelines.

 

If bird flu continues to be a concern it will eventually impact exports, he added.

 

Late last week, China reported a second human death from bird flu and soybean futures in China sold off on bird flu worries.

 

Cash corn basis bids were mixed Monday morning. Central, Illinois was unchanged at 8 cents over December futures, while St. Louis were 2 cents lower at 14 cents over December futures.

 

On technical charts, analysts note it will take a close above US$2.10 to provide the bulls with some fresh technical momentum. First resistance for March corn is seen at US$2.05, and then at US$2.08. First support is pegged at the contract low of US$2.02 1/2, and then at US$2.00.

 

In other corn news, prices for corn shipped to Asia are expected to hover around last week's levels as demand from Taiwan and South Korea is expected to remain weak, sources said. A Korean-based corn trader noted that demand for corn should be low in the next few weeks as most traders have covered their needs until February. In addition premiums may also be under pressure on steadily declining ocean freight rates.

 

Taiwan Sugar Corp. (TSC) will tender for 23,000 metric tonnes of No. 2 U.S. yellow corn in a buy tender Tuesday, a Taipei-based trader said.

 

Corn futures on China's Dalian Commodity Exchange settled mostly lower on long liquidation with the most active September contract down RMB15/tonne to RMB1,273/tonne.

 

Monday morning the U.S. Department of Agriculture is scheduled to release the weekly export inspections at 10:00 a.m. CST (1600 GMT).