April 20, 2007

 

CBOT Corn Outlook on Friday: Seen 2-4 cents lower on drier weather outlook

 

 

Chicago Board of Trade corn futures are predicted to start day session activity 2 to 4 cents lower Friday as a drier medium-term weather forecast and lower prices in overnight trade are expected to weigh on corn at the opening, a floor analyst said.

 

In overnight electronic trading, May corn slipped 3 3/4 cents to US$3.67 1/2 cents per bushel, July also declined 3 3/4 cents to US$3.78 1/2 and December fell 4 1/2 cents to US$3.75 1/2. E-CBOT volume in July was 13,277 contracts.

 

Corn should open weaker on drier weather forecasts, a floor analyst said. There is rain in the near-term outlooks but after that the forecast is looking drier and that is the prime time for planting corn, the analyst added.

 

The weather models are beginning to diverge with some expecting drier weather and that is not positive for prices, a floor trader said. The nearby months could see some support from any continuation in bear market spreads and corn could draw some support from wheat futures if the recent rally in that market continues, the floor trader added.

 

In the western U.S. Midwest, mainly dry conditions are expected Saturday with scattered showers and thundershowers expected Sunday and Sunday night with amounts 0.30-1.00 inch with the heaviest of this activity in the western and northern areas, DTN Meteorologix Weather said. Mainly dry weather returns on Monday. Temperatures are expected to average above normal Saturday and near-to-mostly above normal Sunday.

 

In the eastern sections of the region, dry weather is forecast Saturday with only a few light showers in northern sections of the region Sunday, Meteorologix Weather said. Mainly dry weather with only a few light showers is expected on Monday. Temperatures are expected to average above normal Saturday and Sunday and near-to-above normal on Monday.

 

In the 6- to 10-day weather outlook, Meteorologix Weather forecasts precipitation near-to-above normal east and near-to-below normal west, while temperatures are expected to average below normal early in the period and near-to-above normal later.

 

On daily technical charts, July corn settled near the session high on speculative buying, a technical analyst said. Trading should continue to be choppy as traders keep a close eye on weather forecasts, he added. Market bulls would gain better upside technical momentum by pushing July above solid chart resistance at last week's high of US$3.85 1/2.

 

First support is seen at US$3.80 and then at US$3.75. First resistance is pegged at US$3.85 1/2 and then at US$3.93.

 

In other corn news, corn futures on China's Dalian Futures Exchange ended lower with the September contract down RMB/3 at RMB1,640/tonne.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the commitment of traders report for the period ending April 17.