April 16, 2008

 

CBOT Corn Outlook on Wednesday: Up 2-3 cents on Weak dollar, follow-through

 

 

Chicago Board of Trade corn futures are expected to open 2-3 cents a bushel higher, supported by U.S. dollar weakness against the world's major currencies, crude oil prices notching record highs and follow-through speculative buying, analysts said Wednesday.

 

Nearby May corn overnight rose 2 1/4 cents to US$6.08 1/4, July was up 2 1/4 to US$6.21 3/4 and new-crop December rose 2 1/2 cents to US$6.27 3/4 a bushel.

 

"I think we're seeing most of this early strength coming from the outside markets and pushed along by the weak dollar," an analyst said.

 

Higher calls for soybeans and wheat are also expected to be supportive for corn, he said.

 

The market continues to receive support from wet weather that is due to affect areas of the Midwest and keep planters out of the fields.

 

Conditions are expected to be mostly dry across the Midwest on Wednesday, but episodes of rain and are forecast for southern and eastern areas of the western corn belt on Thursday and Friday, with totals of 0.30-1.50 inches anticipated, DTN Meteorlogix said. The rains will affect southeastern Nebraska through southern and eastern Iowa and northern Missouri.

 

The western belt will be mostly dry over the weekend.

 

In the eastern corn belt, mostly dry weather will be seen Wednesday and Thursday, with showers and thundershowers developing in the west and spreading east on Friday and Saturday. Conditions will turn drier by Sunday. The heaviest rains are expected in Illinois and western Indiana, Meteorlogix said.

 

The six- to 10-day outlook calls for near- to above-normal rainfall, while temperatures are expected to average near to below normal in the western belt and near to above normal in the east.

 

In other news, China's corn prices were mixed in the week to Wednesday, as farmers begin to plant corn and have essentially stopped marketings. Therefore, processing plants are raising bids to attract product, traders said.

 

In the eastern region, however, prices were lower on sluggish feed demand, which is expected to increase by May on a large expansion in the hog herd.

 

Philippine feed mills may not need to import corn this year due to an increase in local production and a decline in the animal population. Domestic production, estimated at 7.3 million metric tonnes and up 7% from last year, is expected to fully meet demand, said Ric Pinca, a consultant and former vice president of the Philippine Association of Feed Millers.

 

Technically, July corn finds nearby support at Tuesday's US$6.10 session low, which also coincides with the 10-day moving average. Additional support is found near the 20-day moving average of US$5.84 and then at the US$5.74 40-day average, an analyst said.

 

July meets nearby resistance at US$6.22 1/2, Tuesday's pit-session high, then US$6.23 1/2 and the all-time high of US$6.28 1/4 a bushel.