December 5, 2005

CBOT Corn Outlook on Monday: Mixed with quiet trade seen

Corn futures at the Chicago Board of Trade are called to open mixed, with a lack of fresh news likely to lead to choppy trade.

In e-cbot trade, December corn gained 1 cent to US$1.90 3/4 per bushel, March finished up 1/4 cent to US$2.03 1/2. A firmer overnight trade could underpin trade, but two-sided could develop.

Bitterly cold temperatures are forecast for the cattle and hog areas of the Midwest, said DTN Meteorlogix, a private weather firm. The firm says the weather is expected to be mainly dry and will continue to be very cold. Highs are seen in the single numbers and teens and lows below zero Fahrenheit. This could encourage livestock producers to feed animals more corn and soymeal in order to keep up body temperatures and underpin corn prices.

In Argentina's corn-growing regions, temperatures are near normal with generally dry skies. Weather conditions are favorable for developing corn plants.

"It's very possible we could be steady to mixed and consolidate into the (government) report on Friday," said John Kleist of John Kleist Consulting.

On Friday, the U.S. Department of Agriculture is slated to release its December supply/demand and crop production reports. Some analysts said given that the corn export pace is sluggish, it could be the government ratchets down its estimate for exports this marketing year.

Asia corn premiums are expected to remain unchanged in the week ahead as demand is expected to current levels. Asian traders told Dow Jones Newswires that South Korean demand for corn is steady and ocean freight rates appear to be bottoming.

Corn deliveries against the December contract totaled 996 contracts. Major issuers are UBS issuing 144 contracts, Henning Carey/LIT division of Man issuing 114, Citigroup issuing 102 and ABN Amro issuing 111. Stoppers of note included LBS Limited Partnership, a division of Man stopping 249, ABN Amro stopping 192 Cunningham Commodities stopping 184, Citigroup stopping 141 and O'Connor stopping 123.

In Friday's Commitment of Traders report from the Commodity Futures Trading Commission, funds remain net short 38,955, futures only. They cut their position by roughly 11,400 contracts.