December 8, 2006

 

CBOT Corn Outlook on Friday: Weaker start after soft e-CBOT trade

 

 

A weaker start is expected for Chicago Board of Trade corn futures on Friday, as softer overnight trade and little fresh news will likely weigh on trade.

 

Most-active March corn fell 2 1/2 cents to $3.70 a bushel in e-cbot trade. March is seen starting down 2-3 cents a bushel.

 

Analysts expect a quiet, choppy session, with positioning ahead of the U.S. Department of Agriculture's December supply/demand report, due out Monday, the main feature of trade.

 

"We're trending lower with bouts of short covering. The funds are trying to get some profit taking in and that's cooling things off," said John Kleist, senior analyst, Top Third Ag Marketing.

 

Looking ahead to Monday's report, in a survey of analysts conducted by Dow Jones Newswires, 2006-07 corn ending stocks are expected to be at 937 million bushels, slightly above the USDA's November estimate of 935 million.

 

Thursday's session ended firmer after recent losses, but Friday is likely to reverse that trend.

 

"It's a Friday, the end of the week; prices are head to a lower weekly close, so the market just may cool off. I don't expect the funds in any quantity until Monday, if they're going to be back in," Kleist said.

 

There were 979 deliveries posted against the December contract. Major issuers include Iowa Grain and Morgan Stanley & Co. Inc., while the major stoppers were J.P. Morgan and F C Stone.

 

In demand news, USDA said South Korea bought 110,000 metric tonnes of corn. Overnight, Taiwan rejected all bids in a tender to purchase up to 60,000 tonnes of corn.

 

China is expected to release more state grain stocks into the domestic market through auctions over the next few months to stabilize prices of major grains. There is still no timetable for the planned auction. Government officials didn't elaborate on how much corn will be auctioned.

 

A technical analyst puts first resistance for December corn is seen at US$3.75 and then at US$3.80. First support is seen at Thursday's low of US$3.65 and then at US$3.60.