February 29, 2008

 

CBOT Corn Outlook on Friday: Down 1-2 cents, overnight theme, profit taking

 

 

Corn futures on the Chicago Board of Trade are seen starting Friday's day session on the defensive, in step with the overnight trend, as light profit taking and end-of-month positioning applies pressure.

 

Analysts expect corn to open 1 to 2 cents lower.

 

In overnight electronic trading, March corn was 1 cent lower at US$5.42 1/4, May corn was 1 1/4 cent lower at US$5.55, July corn was 1 1/4 cent lower at US$5.66 1/2, and December corn was 3/4 cent lower at US$5.64 3/4.

 

The market is coming into Friday's session a little overbought and without any fresh supportive fundamental news, prices are poised for a lower start, analysts said.

 

Spillover weakness from wheat futures and lack of definitive direction in outside markets with crude oil slipping lower and metals higher in early trade have traders looking to book some profits, analysts added.

 

However, bullish long-range prospects of tightening balance sheets coupled with the recent trend of rallying off lows to test contract highs have sellers cautious of pressing the market, a CBOT floor trader said.

 

A technical analyst said corn bulls still have the solid near-term technical advantage and gained more power Thursday. The corn bulls' next upside price objective is to push and close July prices above resistance at US$5.80. The next downside price objective is to push and close prices below solid support at US$5.51 1/4.

 

First resistance for July corn is seen at Thursday's contract high of US$5.68 3/4 and then at US$5.75. First support is seen at US$5.60 and then at US$5.50.

 

In deliveries, March corn deliveries totaled 1,467 lots. A customer account at Term Commodities was the primary issuer of 786 lots, with a customer account at ADM Investor Services the primary stopper of 1,007 lots. The last trade date assigned was Oct. 9.

 

In other news, European Union licenses to import corn and sorghum rose again in the week ending Feb. 26, to keep the block as a large net grain importer for the 2007-08 marketing year, E.U. data showed Friday. Licenses to import corn rose 108,000 tonnes on the week to total 9.3 million tonnes at 35 weeks into the campaign, which is up more than 2.5 times from the same time last year when licenses tallied 3.6 million tonnes.

 

The DTN Meteorlogix Weather Service said Argentina's central and east crop areas will see more rains during the next week, along with cool conditions. This weather pattern is mostly favorable for filling crops. Western portions of the region will have some drier weather, but this sector has ample soil moisture for continued favorable development.