December 24, 2007

 

CBOT Corn Outlook on Monday: 1/2-1 cent lower; light profit taking seen

 

 

Chicago Board of Trade corn futures are predicted to begin day session trading 1/2-to-1 cent lower Monday, as profit taking and the lack of fresh inputs is expected to limit upside price direction, analysts said.

 

An abbreviated trading session, with many traders expected to be absent ahead of the holiday is also expected to limit trading, the analysts added.

 

The CBOT is scheduled to close at 1:00 p.m. EST ahead of the Christmas holiday and will be closed Tuesday.

 

In overnight electronic trading, March corn slipped 3/4 cent to US$4.42 3/4 per bushel. E-CBOT volume in March was 2,608 contracts.

 

With the holiday Tuesday and the market scheduled to close early, it should be a thinly traded, choppy session, an analyst said. Some participants are expected to be absent and as the session progresses, trading should slow even further, the analyst said.

 

Corn could see some light profit taking and position squaring after reaching new contract highs last week, a commission house analyst said. The lack of fresh news will limit any new positions being established and people will be hesitant take any positions home over the holiday, the commission house analyst said.

 

Thunderstorm activity and cooler temperatures over the weekend helped ease stress to crops in Argentina, DTN Meteorlogix Weather said. Mainly dry weather is forecast for Monday and Tuesday with a chance for a few thunderstorms developing in the west on Wednesday. Temperatures are expected to average near-to-above normal in the period, Meteorlogix Weather said.

 

On daily open auction technical charts, March corn closed at a bullish weekly high close after setting a new life-of-contract high, a technical analyst said. A 10-weekold uptrend is still in place on the daily bar chart and the bulls are still very powerful technically, the analyst said. First resistance is seen at the contract high of US$4.48, and then at US$4.50. First support is seen at US$4.38 1/2, Friday's low and then at US$4.34.

 

Large speculative traders increased their long Chicago Board of Trade futures and options on futures positions by 18,622 contracts and cut 11,197 contracts from their short holdings and are now net long 217,619 contracts as of Dec. 18, the Commodity Futures Trading Commission reported Friday in the supplemental commitment of traders report. Large commercial traders increased their long positions by 26,843 contracts but added 44,797 contracts to their short positions and are now net short 477,677 contracts the CFTC said. Index funds trimmed 3,390 contracts from their long positions and added 798 contracts to their short positions and are net long 358,224 contracts, the CFTC said.

 

In other corn news, China plans on selling 500,000 metric tonnes of corn from state reserves Tuesday to stabilize domestic market prices, the National Grain and Oil Trade Center said Monday.

 

Corn futures on China's Dalian Commodities Exchange settled down modestly with the benchmark May contract down RMB2 to RMB1,722/tonne.

 

The weekly export inspections report will not be released Monday, with the U.S. Department of Agriculture closed Monday due to the holiday.