December 12, 2005

 

CBOT Corn Outlook on Monday: 2-4 cents up on e-CBOT, outside markets

 

 

Corn futures at the Chicago Board of Trade are forecast to open 2-4 cents higher Monday on stronger prices overnight, surging precious metal futures and dry weather in much of South America's crop growing regions over the latest weekend, sources said.

 

In overnight e-CBOT trading, December corn gained 2 1/4 cents to US$1.92 per bushel, March rose 2 1/2 cents to US$2.06 1/4, and May advanced 2 3/4 cents at US$2.15 1/4 per bushel.

 

Higher outside markets should provide support for corn futures this morning, a floor analyst said.

 

Precious metals are sharply higher, the dollar is weaker and crude oil is expected to open at higher levels as well he said.

 

In addition, drier than expected conditions in grain growing regions of Argentina over the weekend should also lend support with little rain expected in the area over the next several days, sources said.

 

The CBOT reported 680 deliveries against the December corn contract Monday morning. Large issuers included the customer account of the Century Group Division of Man Financial, which issued 127 contracts, and the customer account of LBS Limited Partnership, Division of Man Financial, which issued 119 contracts. Large stoppers included the customer account of R.J. O'Brien, which stopped 240 contracts, and the Century Group Division of Man Financial, which stopped 104 contracts.

 

Cash basis bids are unchanged to mostly higher Monday morning. Central Illinois is unchanged at 2 cents over the March future, while St. Louis is 1 cent higher at 4 cents over the March future.

 

On technical charts, analysts note that it will take a close above last week's high of US$2.08 1/2 in March corn to provide bulls with better confidence that a near-term low is in place. Analysts set first resistance for March corn at US$2.04, Friday's high and then at US$2.05. First support is pegged at US$2.02, and then at Friday's contract low of US$1.99 1/2.

 

The Commodity Futures Trading Commission reported Friday that large non-commercial traders were net short 50,880 futures and options on futures contracts as of Dec. 6.

 

In other corn news, prices of corn delivered to Asia may rise in the week ahead as cold weather in the U.S. due to low water levels are causing trouble with the U.S. barge transportation system leading to high premiums, Asian traders said.

 

China's grain output is likely to rise for the second consecutive year, expected to jump 10 million metric tonnes to over 480 million tonnes, the official Xinhua News Agency reported over the weeken on data released from the National Development and Reform Commission.

 

Corn futures settled higher at China's Dalian Commodity Exchange. The most-active September contract settled RMB15 higher to RMB1,332/tonne.

 

The USDA is scheduled to release the weekly export inspections report at 10:00 CST (1600 GMT).