December 16, 2005

 

CBOT Corn Outlook on Friday: Up 1-2 cents, following soybeans, e-CBOT

 

 

Corn futures at the Chicago Board of Trade are expected begin open auction trading 1-2 cents higher Friday, following the tone established overnight in soybeans, sources said.

 

In overnight e-CBOT trading, March corn gained 1 cent to US$2.05 3/4 per bushel and May corn increased by 1 1/4 cents to US$2.15 1/4.

 

Corn will follow the tone set in soybeans this morning, a floor analyst said. There is not much fresh news out there to support prices, but firm soybean prices should spillover into the corn pit, he added.

 

Soybean futures are called to open 6-8 cents higher on short covering and talk of drier weather in parts of South American producing areas next week.

 

Corn may also derive some support from short covering ahead of the weekend and before the holiday, a floor trader said.

 

On technical charts, analysts peg first resistance for March corn at US$2.06 3/4, and then at US$2.10. First support is seen at US$2.04, the bottom of the upside price gap on the daily on the daily bar chart, and then at US$2.02.

 

Corn basis bids were mostly unchanged Friday morning. Central Ill. was unchanged at 2 cents over the March future, with St. Louis unchanged at 5 cents over the March future.

 

In other corn news, Hungary will begin talks with Russia in January to discuss possible exports, as Hungary looks to export some of its corn crop, a Hungarian Agricultural Ministry official said on Friday. Hungary produced a record 9 million metric tonne corn crop this year after producing and 8.5 million metric tonne crop last year. Storage space in the country is tight because of a bumper wheat crop produced this year as well, sources said.

 

The Korean Corn Processing Industry Association (KOCOPIA) bought 107,500 tonnes of optional origin corn from Cargill and Glencore in a tender concluded Friday, a Seoul based trader said. 52,500 metric tonnes while be of Chinese origin with the rest to made up of U.S. and South American origin corn, the trader said.

 

Taiwan's Great Wall Enterprise Company bought 60,000 metric tonnes of U.S. corn overnight from Cargill in a tender concluded Friday, a Taipei based trader said.

 

U.S. farm groups and processors expressed "extreme disappointment" in Canada's decision Thursday to impose duties on unprocessed U.S. corn imports that amount to US$1.65 per bushel. The duties were implemented by the Canadian Border Service Agency based on a preliminary determination that U.S. corn exports are subsidized and dumped in the Canadian market at less than fair market value.

 

Corn futures settled higher at China's Dalian Commodity Exchange on spillover from soybean futures, sources said. The most-active September contract gained RMB4 higher to RMB1,328/tonne.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the latest Commitment of Traders Data at 2:30 CST (2030 GMT).