January 13, 2006

 

CBOT Corn Outlook on Friday: Steady; looking for direction

  

 

Corn futures at the Chicago Board of Trade are expected to begin trading Friday steady to 1/2 cent higher as the market searches for direction after Thursday's USDA crop reports, sources said.

 

In overnight e-CBOT trading, March corn slipped 1/4 cent to US$2.12 1/2 per bushel, May corn gained 1/4 cent to US$2.22 1/2, and July corn rose 1/2 cent to US$2.31.

 

There's a long weekend ahead for the market and there should be some position squaring ahead of it, a floor analyst said. Plus, corn futures could see some support as it recovered nicely after the weaker opening on Thursday despite the bearish crop reports, he added.

 

Corn is searching for direction and should trade both sides today, a commission house broker said. The fundamentals were not positive in Thursday's reports and new long positions might not be generated ahead of the long weekend, but the market could see index fund buying return, providing support, he added. Any strength chould be limited by the weak fundamental picture and the rainfall in Argentina which has reduced the impact of recent hot and dry weather impacting the crop, he said.

 

Frequent episodes of rain and the lack of hot weather will end stress to corn and return favorable growing conditions in Argentina, DTN Meteorlogix weather said. Scattered showers and thundershowers occurred Thursday in Argentina with additional precipitation expected in the next several days, Meteorlogix added.

 

Cash corn basis bids were mixed Friday morning. Central Illinois was unchanged at 3 cents over the March; with St. Louis was 3 cents lower at 2 cents over the March.

 

On technical charts, analysts see first resistance for March corn at US$2.13, Thursday's high and then at US$2.15. First support is pegged at US$2.09 3/4, Thursday's low and then at US$2.08.

 

In other corn news, the deadly strain of H5N1 bird flu could be passing from person to person in Turkey even though health experts have no evidence the virus is spreading that way, a senior World Health Organization official said Thursday. Guenael Rodier, the WHO's head of communicable diseases and response told the Associated Press experts cannot rule out person-to-person infection because "we have not documented each and every case properly."

 

Corn futures traded on China's Dalian Futures Exchange settled mostly lower Friday, with the most active September contract down RMB5, ending at RMB1,367/tonne.

 

Friday afternoon the Commodity Futures Trading Commission is scheduled to release the latest Commitment of Traders data as of Tuesday, Jan. 10.

 

On Monday, agricultural futures markets will be closed at the CBOT for the Martin Luther King Jr. holiday.