February 13, 2006

 

CBOT Corn Outlook on Monday: Steady down 1 cent, in tune with e-CBOT

  

 

Corn futures on the Chicago Board of Trade are seen starting Monday's open auction session slightly lower, in tune with e-CBOT price action, as pressure from outside markets promote a defensive tone.

 

Analysts expect corn futures to open steady to 1 cent per bushel lower. In overnight electronic trading, March corn was 1 1/4 cent lower at US$2.20, and May corn was 1 1/4 cent lower at US$2.30 1/2 per bushel.

 

The market is poised to start a little weaker, succumbing to outside pressures, with inflationary markets down, carryover weakness from Friday's poor technical close and overnight declines in Chinese futures casting a bearish cloud over futures.

 

Technical analysts said last week's high of US$2.36 3/4 in May corn is solid overhead technical resistance for market bulls to overcome. A close below last week's low of US$2.27 1/2 would provide the market with fresh downside technical momentum.

 

First resistance for May corn is seen at US$2.34 3/4--Friday's high--and then at US$2.36 3/4--last week's high. First support is seen at US$2.30 1/2--Friday's low--and then at US$2.27 1/2.

 

However, traders say the market remains at the mercy of the speculative sector as the absence of fresh fundamental news amid the heavy build up of speculative positions in the market, leaves futures vulnerable to the influence of fund buying and selling.

 

Corn futures open interest at the CBOT, rose by 13,027 contracts on Friday based on preliminary volume and open interest data released by the exchange. Corn open interest propelled to 1,064,505 contracts.

 

Meanwhile, drier outlooks for Argentina remains threatening to crops, but weather has been placed on the back burner of the market, added Roose.

 

DTN Meteorlogix Weather Service said no significant rain is forecast for the next 5-7 days in Argentina. No significant hot weather is on tap a 3-5 day period, but it may turn hot during the weekend into early next week. Today's weather maps show a moderate upper level ridging forming over east-central Argentina late this week and this coming weekend, Meteorlogix said.

 

The best chance for showers during the next 5 to 7 days in Brazil is from Parana northward. Rio Grande Do Sul may experience a few light showers during the week, with temperatures near to above normal. Meanwhile, less rainfall and warmer temperatures seen during the week will favor maize crops in South Africa, Meteorlogix added.

 

The Commodity Futures Trading Commission said Friday in its commitments of traders report that large speculative traders held net long futures and options positions totaling 125,292 lots in corn as of Feb. 7.

 

On tap for Monday, the U.S. Department of Agriculture is scheduled to release its weekly export inspections report at 10:00 a.m. CST (1600 GMT).

 

In overseas markets, corn futures on China's Dalian Commodity Exchange settled mostly lower. The benchmark September 2006 contract fell RMB17 to settle at RMB1,461/tonne, after trading between RMB1,451/tonne and RMB1,472/tonne.