December 30, 2005

 

CBOT Corn Outlook on Friday: Expected down, following overnight trade

  

 

Corn futures at the Chicago Board of Trade are expected to begin trading 1 cent lower based off the overnight trade and expected position squaring on the last trading day of the year, sources said.

 

Friday's trading session will end at noon CST as the CBOT will close early ahead of the New Year's holiday and will remain closed Monday, before reopening Tuesday.

 

In overnight e-CBOT trading, March corn slipped 1/4 cent to US$2.10 3/4 per bushel, May corn edged 1/4 cent lower to US$2.19 3/4, and July corn fell 1/2 cent to US$2.28 per bushel.

 

It's the last day of the month, the quarter and the year, a floor broker said. Corn export sales were below expectations and the market could see some spillover weakness from Thursday and the poor sales he added. There should be some evening up of positions Friday, he added.

 

The market will want to close the books on 2005 and concentrate on 2006, so not much is expected to happen Friday, a floor trader said.

 

Corn futures sold off Thursday after grinding their way higher for almost two weeks on fund and technical buying despite little fresh fundamental news.

 

The U.S. Department of Agriculture reported weekly corn exports at 360,200 metric tonnes for the week ended Dec. 22, a marketing year low and below analyst's estimates of 550,000-800,000 metric tonnes.

 

Dry conditions with a few light showers are forecast over the next several days in Argentina with temperatures near to above normal, DTN Meteorlogix weather said.

 

Corn basis bids were mixed Friday morning. Central Illinois was unchanged at 3 cents over the March future while St. Louis was 4 cents higher at 3 cents over March.

 

On technical charts, analysts note that March corn fell below US$2.13 1/4, a key chart point in Thursday's trade and if the market declines beneath US$2.10 that will open the door for an additional pullback in prices. Support is seen at US$2.10 and then at US$2.04 1/2. Resistance is pegged at US$2.13 1/4 and then at US$2.17. The bulls need to rally corn past US$2.17 to reignite upward momentum, analysts said.

 

In other agricultural news, corn futures at China's Dalian Commodity Exchange settled moderately lower, sources said. The most-active September contract fell RMB16 to RMB1,368/tonne.