December 6, 2005

 

CBOT Corn Outlook on Tuesday: Steady-Weaker, looking for direction

 

  

Corn futures at the Chicago Board of Trade are called to open steady to weaker on Tuesday, following softness in overnight trade and a lack of fresh news.

 

Analysts expect a steady to weaker open, but two-sided trade could develop.

 

In e-cbot trading December corn was 1/4 cents weaker at US$1.93 1/4 a bushel. March corn was flat at US$2.06 3/4.

 

News for corn is light and another choppy day of trade is likely. Corn will likely look to neighboring wheat and soybeans for direction or wait to see what the funds want to do, traders said.

 

CBOT March remains in a bear market despite Monday's short covering rally, technical analysts said. However, a close above US$2.10 would provide the bulls with better confidence that a near-term low is in place.

 

Resistance for March corn is at US$2.08 1/4 and then at US$2.10. Support is seen at US$2.05 and then at US$2.03 1/4.

 

Corn traders are looking ahead to Friday's U.S. Department of Agriculture's December supply and demand report, but not much bullish news is expected from that report as analyst said the government might lower its export estimate for corn.

 

Corn deliveries against the December contract totaled 1,115 contracts. Major issuers were USA Trading issuing 192 contracts, Citigroup issuing 200 and ABN Amro issuing 155, Cunningham Commodities issuing 184 and O'Connor issuing 123. Stoppers of note included ABN Amro stopping 214, Cunningham Commodities stopping 104, O'Connor stopping 200 and Iowa Grain stopping 103.

 

Mostly dry conditions in Argentina's corn-growing areas are forecast for the next few days, DTN Meteorlogix private weather firm said.

 

The World Health Organization said Tuesday Asia would likely suffer more of the high-pathogenic H5N1 bird flu outbreaks and human infections in the coming weeks because the virus typically spreads the greatest in winter. WHO said experience in the past two years has shown the H5N1 bird flu virus is most active at this time of the year, and would likely peak in January and February.

 

Chinese corn futures and domestic cash prices are firmer on an upbeat outlook for China's corn exports in the coming months, Asian sources told Dow Jones Newswires. Talk has been circulating in the market over the past few days that China has issued 4 million tonnes worth of corn export quotas for early next year and that the government will provide a subsidy of RMB140 for each tonne of corn exported.

 

An official with COFCO Maize Co., a major corn exporter in China, said she had heard of the new quotas, but couldn't confirm the subsidy or the time frame the quotas are valid for.