April 17, 2009

 

CBOT Corn Outlook on Friday: Down 1-2 cents on improved planting prospects

 

 

Chicago Board of Trade corn futures are expected to open 1 to 2 cents lower Friday as the trade eyes an expected improvement in planting conditions next week.

 

In overnight trading, May corn was down 1 1/2 cents to US$3.84 1/4 per bushel and July corn was down 1 1/2 cents to US$3.93 3/4.

 

Traders will likely "play it safe" heading into the weekend, particularly given the prospect of improved planting weather next week, said Arlan Suderman, analyst for Farm Futures.

 

DTN Meteorologist Mike Palmerino said that cool, wet weather over the weekend and into early next week will limit field work and keep soil temperatures cool. But warmer, drier weather will arrive during the middle to latter part of next week.

 

Soybeans remain the leader of the grains markets, analysts said. Strength in soybeans, which has surged on strong export demand and the weak Argentina crop, will continue underpin corn, which has little of its own strength, analysts said.

 

Weekly export sales reported Thursday were strong, exceeding 1 million metric tonnes, but did not rally the market.

 

"Demand is firming up, but it's not impressive enough to divert attention away from improved planting conditions," Suderman said.

 

Analysts said that South Korea bought 165,000 metric tonnes of U.S. corn last night.

 

Traders add that there are concerns about ethanol demand, particularly in light of a pending decision in California next week on a proposed low-carbon emissions standard that could curtail ethanol use.

 

Outside markets are mixed, analysts said. Suderman said a stronger U.S. dollar could put pressure on commodities.

 

A trader said the market is range-bound, remaining above US$3.80 due to soybeans' surge but failing to break US$4 because of the looming presence of farmer selling.

 

The next upside price objective is to push and close July prices above solid technical resistance at the April high of US$4.17 1/2 per bushel, a technical analyst said. The next downside price objective for the bears is to push and close prices below solid technical support at US$3.87 1/2 a bushel.

 

First resistance for July corn is seen at US$4.00 and then at US$4.04, the technical analyst said. First support is seen at Thursday's low of US$3.90 and then at US$3.87 1/2.