April 8, 2008

 

CBOT Corn Outlook on Tuesday: Steady to up 1 cent ahead of USDA report

 

 

Chicago Board of Trade corn futures are expected to open steady to 1 cent firmer ahead of Wednesday's release of the U.S. Agriculture Department's April supply/demand reports and following overnight trading on the electronic platform, analysts said Tuesday.

 

In overnight activity, May corn was up 1/2 cent at US$5.90 1/2 and December was steady at US$6.03 1/2 a bushel.

 

Firmer calls for soybeans and wheat may help put a supportive floor underneath corn prices.

 

Tuesday's trade may be a bit subdued ahead of the USDA reports, a trader said, in which the government is expected to lower 2007-08 ending stocks by about 135 million bushels to 1.303 billion, a Dow Jones Newswires survey found. Many analysts expect an increase to the feed and residual number in light of a lower-than-expected stocks report as of March 1.

 

Meanwhile, traders are keeping an eye on the latest round of showers and thunderstorms to affect the Midwest.

 

Rains are currently moving over eastern Kansas and Missouri, southern Iowa and parts of Illinois and northern Indiana. Over the next few days, the eastern Midwest and Delta regions will see widespread snow, rain and thunderstorms, further delaying spring fieldwork. While there is some chance for improving conditions in the next six to 10 days, "this is very uncertain," private forecaster DTN Meteorlogix said.

 

The western corn belt will see moderate rain through southern and east-central areas Tuesday and mostly dry weather on Wednesday. Moderate to heavy snow, rain and thunderstorms are possible Thursday into Friday, with precipitation averaging 0.50-1.50 inches and locally heavier.

 

In the eastern belt, 0.25-1.00 inch of rain may fall through western and northern locations Tuesday and Tuesday night, with a chance for scattered showers in the southeast. Another round of showers is forecast for Thursday and Friday, bringing 0.30-1.50 inches of rain and locally heavier amounts, Meteorlogix said.

 

The Midwest six-to 10-day outlook calls for near- to below-normal temperatures, while rainfall should average near to below normal in the west and near to above normal in the east.

 

Technically, December corn put in a bearish reversal on the daily chart Monday, which could signal further weakness, an analyst said. Nearby resistance is met at US$6.13, with support located at US$6.01 1/2, then at the moving averages of US$5.87, US$5.74 and US$5.53 a bushel.