December 5, 2006

 

CBOT Corn Outlook on Tuesday: Called down 1-3 cents on follow through

 

 

Chicago Board of Trade corn futures are expected to start day session activity 1-to-3 cents lower Tuesday, following the losses set in Monday's session and weaker prices overnight, floor sources say.

 

In overnight e-CBOT trading, December corn fell 1 1/4 cents to US$3.61 1/2 per bushel and March lost 3 1/4 cents to US$3.72 1/4. e-CBOT volume in March was 6,225 contracts.

 

Corn should start out easier but could trade both sides, a floor analyst said. Energies and metals are higher and might support the grains, he added.

 

The market had double digit losses Monday and it could see a bounce to the upside, a commission house analyst said. However, there was a lack of fresh news out overnight which could limit trading but market direction will be determined by what the funds want to do, he added.

 

Since making a new life of contract high last week, March corn has declined over 20 cents.

 

On day session open auction technical charts, no major chart damage occurred Monday despite gapping open lower and hitting a fresh two-week low, a market technician said.

 

First resistance for March corn is seen at US$3.80 and then at Monday's high US$3.82. First support is seen at Monday's low of US$3.72 1/4 and then at US$3.70.

 

Deliveries posted against the December contract totaled 1,158 contracts. Large issuers included the house account of Deutsche Bank, which issued 1,108 contracts, and the customer account of Bear Stearns, which issued 44 contracts. Large stoppers included the customer account of Bank of America Securities, which stopped 578 contracts; the customer account of FC Stone, which stopped 296 contracts and the LBS division of Man Financial, which stopped 200 contracts.

 

The last trade assigned was Nov. 14.

 

Corn basis bids were mixed Tuesday morning. Peoria, Illinois was up 3 cents at 2 cents under the December future.

 

In other corn news, China's largest corn producing province is expected to produce 19.25 million metric tonnes of corn in 2006, the Ministry of Agriculture said on its website Tuesday. The ministry said that corn production in Jilin will increase 3.2% from the previous year on 2.9 million hectares. China's corn production is expected to top 142 million tonnes up from 139.4 million according to the China National Grains & Oils Information Center.

 

South Africa's corn crop is expected to reach 10.5 million metric tonnes in 2006, up from the 6.9 million produced in 2005 as high prices have led to an increase in the area planted, according to a U.S. Department of Agriculture attach¨¦ report posted Monday on the Foreign Agricultural Services web site.

 

Corn futures on China's Dalian Commodities Exchange settled lower with the benchmark May contract down RMB/16 at RMB 1,558/tonne.