December 3, 2007

 

CBOT Corn Outlook on Monday: 1-2 cents lower on e-CBOT, weaker outside markets

 

 

Chicago Board of Trade corn futures are expected to begin trading 1-to-2 cents lower Monday, undermined by a weaker tone in overnight activity and lower prices in energy and metals markets, an analyst said.

 

In overnight electronic trading, March corn slipped 1/4 cent to US$4.01 1/4 per bushel. e-CBOT volume in March was 4,012 contracts.

 

Corn futures should be lower to start, following the outside markets as energy and precious metals prices are lower, an analyst said. Price direction in overnight trading was on the negative side and that should also influence the market to trade lower at the start, he added.

 

The lack of fresh news should keep corn searching for direction and looking to other markets for its footing, a trader said. It rained across much of the U.S. winter wheat belt over the weekend and it also rained in South America, which should limit the upside in both wheat and soybeans and keep buying interest in corn quiet, the trader said. After recent price strength, corn could also see some long liquidation, the trader added.

 

On daily open auction technical charts, March corn futures settled slightly higher Friday and near mid-range. If outside markets continue to trade lower, corn will likely see more selling pressure, though the bulls still have the technical advantage, a technical analyst said.

 

The next upside price objective remains closing prices above solid resistance at US$4.09, last week's high, with the downside objective closing prices below solid support at US$3.95. First resistance for March is seen at US$4.05, Friday's high and then at US$4.07 1/2. First support is seen at US$3.95 1/2 and then at US$3.91 1/2.

 

Deliveries posted against the December future were 2,777 contracts Monday. Large issuers included the customer account of Calyon which issued 600 contracts and the customer account of R.J. O'Brien, which issued 506 contracts. Large stoppers included the customer account of Man Professional Clearing, which stopped 677 contracts, and the customer account of Cunningham Commodities, which stopped 535 contracts. The last trade assigned was Nov. 29.

 

Index funds reduced their Chicago Board of Trade long corn futures and options on futures positions by 12,328 contracts and trimmed their short positions by 649 contracts and are now net long 346,505 contracts as of Nov. 27, the Commodity Futures Trading Commission reported Friday in the supplemental commitment of traders report. Commercial traders cut their short positions by 11,169 contracts and added 51 contracts to their long positions and as a result are now net short 404,989 contracts, the CFTC said. Large speculators slashed their long holdings by 13,317 contracts and cut their short positions by 11,402 contracts and are now net long 153,864 contracts as of Nov. 27.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled mostly higher with the benchmark May contract up RMB6 to RMB1,762/tonne.

 

Monday, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 11:00 a.m. EST.