December 10, 2007

 

CBOT Corn Outlook on Monday: 1-2 cents higher; supported by wheat rally

 

 

Chicago Board of Trade corn futures are predicted to start day session trading 1 to 2 cents higher Monday, buoyed by an expected strong start in wheat futures after wheat posted large gains in overnight trade, an analyst said.

 

In overnight electronic trading, March corn ended unchanged at US$4.17 1/4 cents per bushel with CBOT March wheat up 16 3/4 cents at US$9.38 1/4 per bushel. E-CBOT volume in March corn was 8,993 contracts.

 

Corn will be a follower of wheat, a commission house analyst said. Wheat scored good gains in overnight trade after Friday's jump in prices and should help supply spillover support for corn, the analyst said.

 

Despite the recent rally in corn, analysts don't expect it to consolidate ahead of Tuesday's U.S. Department of Agriculture supply/demand report.

 

The average 2007-08 ending stocks estimate is 1.879 billion bushels according to a survey of 16 analysts, slightly lower than the 1.897 estimated in November by the USDA. The report is scheduled for release Tuesday at 8:30 a.m. EST.

 

Follow through technical strength after March corn made another 5 1/2 month on daily technical charts Friday should also supply support, a trader said.

 

On daily open auction technical charts, March corn futures closed higher Friday and near session highs and there are no signs of a market top being close at hand, a technical analyst said. Market bulls have solid near-term technical advantage and gained more power Friday, the analyst said. The next upside objective remains pushing prices above solid technical resistance at US$4.23 per bushel with the next downside objective is to push prices below solid support at US$4.00.

 

First resistance for March is seen at US$4.17 3/4, this week's high and then at US$4.20. First support is seen at Friday's low of US$4.11 1/2 and then at US$4.09.

 

The weather pattern in Argentina continues to look drier than normal, DTN Meterologix Weather said.

 

Thunderstorm activity early Monday will favor eastern growing areas before turning drier later. The region should be mainly dry Tuesday through Sunday. Long range charts suggest dry weather continues into early next week, Meteorlogix Weather said.

 

Large speculative traders boosted their long Chicago Board of Trade futures and options on futures positions by 21,392 contracts and trimmed their short holdings by 347 contracts and are now net long 175,602 contracts as of Dec. 4, the Commodity Futures Trading Commission reported Friday in the supplemental commitment of traders report. Large commercial traders cut their long positions by 16,289 contracts while adding 10,823 contracts to their short positions and are now net short 432,101 contracts the CFTC said. Index funds added 10,516 contracts to their long positions and increased their short positions by 432 contracts and are net long 356,589 contracts, the CFTC said.

 

Deliveries posted against the Chicago Board of Trade December future were 2,623 contracts Monday. Large issuers included the customer account of Man Professional Clearing which issued 680 contracts, the customer account of Cunningham Commodities, which issued 427 contracts and the customer account of Shatkin, which issued 275 contracts. Large stoppers included the customer account of Man Professional Clearing, which stopped 609 contracts, the customer account of Shatkin, which stopped 267 contracts and the house account of Tenco, which stopped 198 contracts. The last trade assigned was Dec. 7.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled higher with the benchmark May contract up RMB8 to RMB1,743/tonne.

 

The U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 11:00 a.m. EST.