December 27, 2005

 

CBOT Corn Outlook on Tuesday: Steady on little news, holiday markets

 

 

Corn futures at the Chicago Board of Trade are expected to open steady Tuesday, in the absence of fresh fundamental news and with many traders extending their holidays, sources said.

 

In overnight e-CBOT trading, March corn rose 1/4 cent to US$2.14 1/4 per bushel, May also edged up 1/4 cent to US$2.22 3/4, and July ended the overnight session unchanged at US$2.30 3/4 per bushel.

 

Market fundamentals have not changed over the last few weeks, but concerns that commodity index funds will be in to buy futures in the new year has led traders to be cautious about selling, with that pattern expected to continue today, a floor analyst said.

 

Last week most-active March corn rallied to highs last seen in mid-October as technical buying and short covering ahead of the new year helped provide support, a floor trader said.

 

Trading volume is expected to by lighter than normal as some trading operations have closed up shop for year, sources said.

 

Widely scattered showers are expected over the next several days in Argentina through Wednesday, with isolated heavier precipitation expected Thursday through Saturday, DTN Meteorlogix weather said.

 

Cash market basis bids are unchanged to mixed Tuesday morning. Central Illinois is unchanged at 3 cents over the March future, while St. Louis was one cent higher at 6 cents over the March future.

 

On technical charts, March futures pushed through key technical resistance from Nov. 14 at the close which is positive for the bulls, technical analysts said. First resistance in March is seen at US$2.15 and then at US$2.20, with first support pegged at US$2.12 and then at US$2.10.

 

In other agricultural news, China's November corn exports were pegged at 467,947 metric tonnes, according to the country's General Administration of Customs.

 

Prices for corn delivered to Asia may decline in the week ahead on falling ocean freight rates and expected weakness in U.S. futures, Asian traders said.

 

Little demand is expected this week because of the holidays, a cash trader said in Seoul, South Korea.

 

Other Asian traders said they expect that U.S. farmers would soon begin to sell their corn crop, sparking bearishness in futures.

 

Corn futures ended higher at China's Dalian Commodity Exchange in active trading, sources said. The most-active September contract rose RMB13 to RMB1,384/tonne.

 

The U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 10:00 CST (1600 GMT) for the week ended Dec. 15.