April 11, 2008

 

CBOT Corn Outlook on Friday: Up 2-3 cents at open in cautious trade

 

 

Chicago Board of Trade corn futures are expected to open 2-3 cents a bushel higher Friday, as prices bounce technically from the recent lows, though the trade is expected to be cautious ahead of the weekend, analysts said.

 

In overnight electronic trade, May corn was up 2 3/4 cents at US$5.97, July was 2 cents higher at US$6.09 1/2 and December was up 1 1/2 cents at US$6.12 3/4 a bushel.

 

Price direction is expected to key on the weather forecasts, which point to a drying pattern for next week, said Don Roose, president of U.S. Commodities in Des Moines.

 

"A lot of it is going to depend on the weather. I think if the trade sees that we're going to look at these maps today and try and dry out a bit for next week - and if the maps at noon confirm that - you might get some liquidation going into the weekend," Roose said.

 

Liquidation may also be seen by the end of the session amid nervous longs not wanting to take a chance on changing weather forecasts over the weekend.

 

The weather influence may be offset somewhat by the fact that with prices still fairly lofty near contract highs, there may be more of an attitude that says, "Show me," that the weather will continue to be cool and wet before traders begin any wholesale liquidation, Roose explained.

 

Private forecaster T-storm Weather calls for Midwest soils to remain cool and damp through early next week, after which beneficial warmer temperatures and drier conditions should spread across the region from the middle to the end of the week.

 

In general, improved planting conditions are expected from April 15-20, though another round of stormy weather may follow, T-storm Weather said.

 

Scattered showers are currently moving through the Dakotas and parts of Minnesota and Iowa, with more rains moving across southern Indiana into southern and central Ohio.

 

DTN Meteorlogix also calls for dry conditions Monday through Wednesday, with temperatures starting well below normal and rising to above normal by Wednesday, which will help warm the soils as farmers attempt to prepare fields for planting.

 

While corn is called to open firmer, mixed calls for soybeans and wheat may influence the market as well, a trader said, and corn could easily fall into a mixed trade on spillover action from the bean pit.

 

Technically, Roose expects July corn to find "pretty good" support near US$6 a bushel.

 

Bulls still have the upper hand in corn, another analyst said, with no indications a market top is at hand. The next upside objective for bulls is to push July up to and close above the US$6.28 1/4 contract high.