December 13, 2005

 

CBOT Corn Outlook on Tuesday: Flat-1/2 cent higher, following overnight

 

 

Corn futures at the Chicago Board of Trade on Tuesday are expected to open in line with Monday's settlement prices to 1/2 cent higher, following the tone established in overnight trading, sources said.

 

In overnight e-CBOT trading, March rose 1/4 cent to US$2.08, and May added on 1/4 cent to US$2.17 per bushel.

 

After Monday's session, activity should be range bound Tuesday morning, said Don Roose, president of U.S. Commodities in West Des Moines, Iowa. Although there was good cash movement Monday, the basis held together well, he said.

 

The technical picture got all shook up Monday and the funds were caught short. They are still short but the market looks to trade within the range established Monday as it begins edging into a holiday type trading atmosphere he added.

 

Precious metals were called to open mixed Tuesday morning and soybeans were called to open 1 cent lower. Both of these markets helped provide support to corn prices on Monday.

 

Mostly dry weather is expected over the next several days in Argentina with normal to above normal temperatures, with scattered shower and thunderstorms predicted near week's end DTN Meteorlogix weather said.

 

The CBOT reported 1,284 deliveries against the December corn contract Tuesday morning. Large issuers included the customer account of the LBS Lited Partnership, Division of Man Financial, which issued 610 contracts, the customer account of Citigroup Global Markets Inc., which issued 222 contracts and the customer account of Man Financial, which issued 200 contracts.

 

Large stoppers included the customer account of the Century Group Division of Man Financial, which stopped 260 contracts, the customer account of ABN Amro, which stopped 412 contracts and the customer account of Cunningham Commodities, which stopped 217 contracts.

 

Cash basis bids are unchanged to mixed Tuesday morning. Central Illinois was unchanged at 2 cents over the March future, while St. Louis was also unchanged at 4 cents over the March future.

 

On technical charts, analysts noted that fact that corn rallied in the face of a bearish USDA report on Friday strongly suggests a harvest low is in place. Analysts peg first resistance for March corn at US$2.09 1/4, Monday's high and then at US$2.12. First support is pegged at US$2.05 3/4, Monday's low and then at US$2.04, the bottom of Monday's upside price gap on the daily bar chart.

 

In other corn news, corn futures ended slightly lower at China's Dalian Commodity Exchange. The most-active September contract ended RMB2 lower to RMB1,330/tonne.