December 2, 2005

CBOT Corn Outlook on Friday: Steady to 1/2 cent higher, following e-CBOT

Corn futures at the Chicago Board of Trade are expected to open steady to 1/2 cent higher, following the tone established in overnight trade, floor analysts said.

In overnight e-CBOT trading, December corn gained 3/4 cent to US$1.90 per bushel, March finished up 1/4 cent to US$2.04, and May ended up 1/2 cent at US$2.12 3/4 per bushel.

"There's not much fresh fundamental news to trade off of," a floor trader said. However, the market ended in positive territory yesterday, and it was steady overnight and could build off of that today. In addition, the cold weather could support prices as feed usage is increased, he added.

Cash corn basis bids were unchanged to higher Friday morning. Central Illinois was 3 cents under the March futures, while St. Louis was unchanged at 1 cent over March futures.

The CBOT reported 1,581 deliveries against the December corn contract. Large issuers included the customer account of Citigroup Global Markets Inc., which issued 410 contracts, and the customer account of R.J. O'Brien, which issued 367 contracts, with other issuers wide and scattered. Large stoppers included the customer account of Citigroup Global Markets Inc., which stopped 334 contracts, the customer account of the LBS division of Man Financial, which stopped 252 contracts and the Century Group division of Man Financial, which stopped 120 contracts.

On technical charts, market technicians see first resistance for March corn at US$2.04, Thursday's high and then at US$2.05. First support is pegged at US$2.02, then at US$2.00 1/4, the contract low and then at US$2.00.

In other corn news, South Africa farmers produced 11.45 million metric tonnes of corn in 2004-05, up over 20% from the previous year, according to the country's National Crop Estimates Committee.

South Korea's Korea Feed Association (KFA) bought 60,000 metric tonnes of optional origin corn from Toepfer in a tender concluded Friday, a Seoul trader said.

Corn futures on China's Dalian Commodity Exchange ended at higher levels on light follow through buying sources said, with the most active September contract up RMB13/tonne to RMB1,298/tonne.