February 7, 2006

 

CBOT Corn Outlook on Tuesday: Up 1/2-1 cent; following e-CBOT theme

 

 

Chicago Board of Trade corn futures are seen starting Tuesday's open auction session on firmer footing, following the overnight theme as the market rebounds from Monday's minor setback.

 

Analysts expect corn futures to open 1/2 cent to 1 cent per bushel higher.

 

In overnight electronic trading, March corn was 1/2 cent higher at $2.33 1/4, and May corn was 1 cent higher at $2.34 per bushel.

 

The absence of fresh fundamental news is seen keeping prices hovering within a range, with the rolling of nearby positions seen as a featured attraction, analysts said.

 

The Goldman Sachs commodity index roll is expected to begin Tuesday, keeping spreads active as the index adjusts positions ahead of the delivery period for March futures, traders added.

 

Trade positioning ahead of Thursday's U.S. Department of Agriculture supply and demand report is expected to be a feature as well, with traders keeping an eye on technically related fund activity, following Monday's setback after establishing fresh 5-month highs in the market.

 

The average of trade estimates from a Dow Jones Newswires survey pegged 2005-06 ending stocks at 2.384 billion bushels, a 42 million bushel decrease from the January projection of 2.426 billion. USDA is scheduled to release its supply and demand revisions Thursday 7:30 a.m. CST (1330 GMT).

 

Technical analysts said Monday's high of $2.27 1/2 is strong overhead technical resistance for March corn to overcome, but the market still has near-term upside technical momentum as no chart damage occurred in Monday's retreat.

 

First resistance for March corn is seen at $2.25 and then at $2.27 1/2 - Monday's high. First support is seen at $2.21 and then at $2.19.

 

DTN Meteorlogix Weather Service said a cold front moving into Argentina on Wednesday may cause a few thundershowers, but most of storms should be confined to Buenos Aires. In Brazil, the best chance for rain during a five-to-seven-day period is from Parana northward. Rio Grande Do Sul may trend drier during this period.

 

In news, traders said talk was circulating that South Korea was looking to purchase 110,000 metric tonnes of optional origin non-GMO corn.

 

Meanwhile, corn futures open interest at the CBOT, rose by 4,056 contracts on Monday based on preliminary volume and open interest data released by the exchange. Corn open interest propelled to a record 1,045,899 contracts.

 

In overseas markets, corn futures on China's Dalian Commodity Exchange settled higher Tuesday. The benchmark September 2006 contract opened lower on the CBOT losses, but soon entered positive territory with new buying from long position holders. It rose RMB15 to settle at RMB1,508/tonne, after trading between RMB1,468/tonne and RMB1,538/tonne.

 

In other news, the Ukrainian government to Feb. 3 purchased 3.561 million metric tonnes of grain harvested in 2005 from domestic producers, the Agriculture Ministry said. In addition, the government expects regional authorities to buy a further 1.5 million tonnes of grain for their own needs.