August 6, 2007

 

CBOT Corn Outlook on Monday: Seen down 6-8 cents on U.S. midwest rains

 

 

Chicago Board of Trade corn futures are predicted to start day session trading 6-to-8 cents lower Monday after better-than-expected rains over the weekend in the U.S. Midwest, analysts said.

 

In overnight electronic trading September corn dropped 6 3/4 cents to US$3.19 3/4 per bushel, and December fell 7 cents to US$3.36. E-CBOT volume in December was 6,727 contracts.

 

Rainfall occurred throughout much of the U.S. Midwest over the weekend with better-than-expected amounts in dry areas of the western U.S. Midwest including eastern South Dakota and Minnesota, a trader said.

 

Price direction will be dictated by the rain that occurred over the weekend, a commission house analyst said. In addition there is more rain in the forecast for much of this week across the U.S. corn belt so the market is expected to take some weather premium out, following the tone set in overnight activity, the analyst said.

 

Amounts of 0.50-2.00 inches of rain fell in eastern South Dakota, southern Minnesota and northern Iowa during the weekend with locally heavier amounts reported, DTN Meteorologix Weather said.

 

In the western U.S. Midwest, periods of scattered showers and thunderstorms are expected from Monday through Wednesday, with southern sections expected to see moisture early in the period and northern areas later in the period, Meteorologix Weather said. Amounts expected range from 0.30-1.50 inches and locally heavier, and temperatures are expected to average above normal with higher in the upper 80's to low 90's Fahrenheit.

 

In the eastern U.S. Midwest, scattered showers and thunderstorms are expected Monday through Wednesday with amounts of 0.30-1.50 inches while southern sections of the region will see only isolated shower activity, Meteorologix Weather said. Temperatures are expected to average above-to-well above normal with highs in the 80's in the north to upper 90's F south.

 

In the 6-to-10 day outlook, temperatures are expected to average mostly above normal and rainfall is predicted near-to-below normal.

 

On daily technical charts, December corn closed mid-range Friday after reaching a fresh three-week high early in the session, a technical analyst said. However, the bears still have the near-term technical advantage as the seven-week old downtrend is still in place from the June high, the analyst said.

 

The bulls' next upside price objective is closing prices above solid resistance at US$3.50 per bushel, with the bears' downside price objective closing prices below last week's low of US$3.24 1/2.

 

First resistance is seen at US$3.46 - Friday's high - and then at US$3.50. First support is seen at US$3.38 1/2, and then at US$3.36.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled higher with the benchmark January contract up RMB/13 at RMB1,557 per metric tonne.

 

Monday at 11:00 a.m. EDT, the U.S. Department of Agriculture is scheduled to release the weekly export inspections and at 4:00 p.m. EDT (2000 GMT), the weekly crop progress report is due out.