December 19, 2005

 

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

 

 

Corn futures at the Chicago Board of Trade are forecast to begin Monday's open outcry trading session 1-2 cents higher, expanding on the tone set overnight and following the expected strength in soybeans, sources said.

 

In overnight e-CBOT trading, March corn rose 1 cent to US$2.08 1/2 per bushel, May added on 1 3/4 cents to US$2.18 and July corn ended up 1 cent at US$2.26 1/4.

 

"The market was higher overnight and we should be higher this morning," a floor trader said. Rainfall over the weekend in Argentina wasn't as heavy as anticipated and some forecasts have reduced the amount of rain expected later in the week, he added.

 

Other traders noted higher outside markets could support corn Monday morning. Precious metals and the CRB index were higher, although the dollar was stronger.

 

Surging soy meal futures overnight at the Dalian Commodity Exchange in China could also add support sources said. Soy meal futures set another volume record at the DCE overnight on heavy buying interest. CBOT soybean futures are called to open 5-7 cents higher on Monday.

 

On technical charts, analysts note it will take a close above US$2.10 in March to establish evidence that the low is in place and that a fresh uptrend can be established. First resistance for March corn is seen at Friday's high of US$2.08 3/4, and then at US$2.10, with first support set at US$2.06 1/4, Friday's low and then at US$2.04.

 

Commodity trading funds and non-commercial traders are net short 47,386 futures and options on corn futures, according to the latest Commitment of Traders data released Friday.

 

In other corn news, Argentina had sold 13.135 million metric tonnes of 2004/2005 Corn for export as of Dec. 16, the Agriculture Secretariat reported. In the same time period last year, Argentina had sold 10.06 million tonnes.

 

Prices for corn delivered to Asia are likely to stay flat in the week ahead as demand remains slack and ocean freight rates stabilize, overseas traders said. They noted ample world supplies with recent talk that China has issued 4 million metric tonnes worth of corn export subsidies for early next year, potentially adding to the supply.

 

Corn futures settled higher at China's Dalian Commodity Exchange on spillover from soybean futures, sources said. The most-active September contract jumped RMB14 higher to RMB1,342/tonne.