December 14, 2009

 

CBOT Corn Outlook on Monday: Seen down 2-3 cents, consolidating recent gains

 

 

Corn futures on the Chicago Board of Trade are poised for a lower start to Monday's day session, consolidating recent advances.

 

Analysts expect corn to open 2 to 3 cents lower.

 

In overnight electronic trading, Dec corn was 3 3/4 cents lower at US$3.85 1/2, and March corn was 2 3/4 cents lower at US$4.01 3/4.

 

The market is set to retrace some of Friday's gains, under pressure from improved weather conditions that show no more snow for the Midwest this week, analysts said.

 

The corn harvest made a little progress last week, and traders anticipate some hedge pressure to emerge from poor quality corn being sold.

 

Continued slow export demand is seen adding to the lower theme, with large deliveries seen against the Dec contract adding pressure.

 

However, underlying concerns about the need for corn to buy 2 to 3 million acres for next year and lingering worries about the how many bushels will be lost or left in the fields until the spring due recent weather in the western Midwest is expected to limit downside risks, analysts said.

 

With not much fresh fundamental news to trade on, traders anticipate technical factors will play a key role in price direction, a CBOT floor analyst said.

 

A technical analyst said the next downside price objective for March corn is to push and close prices below solid technical support at last week's low of US$3.79 a bushel. First resistance for March corn is seen at Friday's high of US$4.06 1/4 and then at US$4.10. First support is seen at US$4.00 and then at US$3.95.

 

The DTN Meteorlogix weather forecast said wet conditions will keep field work slow through the southern and eastern areas of the Midwest while snow cover limits field work in the west and north.

 

Private exporters reported to the U.S. Department of Agriculture export sales of 116,000 metric tonnes of corn for delivery to unknown destinations so far during the 2009/2010 marketing year, the USDA said Monday.

 

In deliveries, December corn deliveries totaled 1,706 lots. Customer accounts at Man Professional Clearing issued and stopped 606 and 627 lots respectively. Customer accounts at JP Morgan issued and stopped 816 and 324 lots, respectively. The last trade date assigned was Dec. 11.

 

The U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 11 a.m. EST, and its weekly crop progress report at 4 p.m. EST. Traders anticipate corn harvest progress in a range of 91% to 95% complete.

 

Monday is the last trading day for December corn futures. The contract expires at 1 p.m. EST.