March 24, 2006

 

CBOT Corn Outlook on Friday: Up 1/2-1 cent, in step with e-CBOT

 

 

Chicago Board of Trade corn futures are seen starting Friday's session slightly firmer, in step with overnight action, attempting to find stability on pre-weekend positioning.

 

Analysts expect corn to open 1/2 to 1 cent per bushel higher.

 

In overnight electronic trading, May corn was 1/2 cent higher at $2.19 3/4, and July corn was 3/4 cent higher at $2.31 per bushel.

 

A little better start is on tap for corn, regrouping from Thursday's declines, as traders square a few positions heading into the weekend, said a CBOT commission house broker.

 

However, traders say upside movement will be tough to sustain without some fresh supportive fundamental news or commodity fund buying support. Thursday, speculative fund buying was limited, with large speculative traders net sellers on the day.

 

Bullish traders have little to hang their hats on, with analysts expecting the market to grind into next week's U.S. Department of Agriculture quarterly grains stock and prospective plantings reports. Underlying fundamentals continue to have a bearish slant to them, with ample cash supplies, improve planting conditions and bird flu concerns overshadowing supportive export demand, traders add.

 

Market technicians said prices are in a steep three-week-old downtrend on the daily bar chart. It will take a close back above resistance at $2.30 to provide fresh upside technical momentum. A close below technical support at this week's low of $2.17 is seen providing better downside technical momentum.

 

First resistance for May corn is seen at $2.22--Thursday's high--and then at $2.24. First support is seen at $2.18 3/4--Thursday's low--and then at $2.17.

 

April options on corn futures expire Friday, with analysts expecting traders to focus on the $2.20 strike price. Cash corn basis bids were mostly unchanged to higher across the Midwest.

 

DTN Meteorlogix Weather Service said the eastern Midwest will experience dry conditions or just a little light snow during the next 48 hours. Light rain or snow develops on Monday, with just some lingering light rain/snow on Tuesday. Temperatures are seen below to much below normal through Monday, near normal Tuesday-Thursday.

 

In the western Midwest, a little light snow is expected before dry conditions return Saturday and Sunday, with light rain/snow on Monday. Temperatures are seen below to much below normal through Sunday, and near to below normal Monday-Wednesday, Meteorlogix forecasts.

 

In overseas markets, corn futures China's Dalian Commodity Exchange settled slightly higher. The most widely held September 2006 contract settled RMB1 higher at RMB1,403/tonne.

 

In news, Berlin authorities said Friday they had detected the lethal strain of H5N1 bird flu in a dead wild buzzard, the first case of the virus in the German capital. Palestinian officials confirmed an outbreak of the deadly H5N1 strain of bird flu at a second farm in the Gaza Strip Friday.

 

The U.N. health agency Friday raised to 104 the confirmed human death toll from the H5N1 strain of bird flu, adding a 3-year-old Cambodian girl who died earlier this week.