April 25, 2008

 

CBOT Corn Outlook on Friday: Down 4-6 cents; overnight theme, technical selling

 

 

Corn futures at the Chicago Board of Trade are poised for a lower start to Friday's day session, taking their cue from the overnight price theme amid follow through technical selling.

 

Analysts expect corn to open 4 to 6 cents lower.

 

In overnight electronic trading, July corn was 6 cents lower at US$5.83 1/2, and December corn was 4 3/4 cents lower at US$5.97 1/4.

 

The combination of a stronger U.S. dollar and the market looking a little toppy on technical charts is expected to keep pressure on corn in early action, said Jason Roose, analyst with U.S. Commodities in West Des Moines, Iowa.

 

Traders are reducing some risk after prices rallied to record highs, and with weather forecasts looking a little clearer after a current cool, wet system moves out next week, enticing participants to booking some profits, he added.

 

Otherwise, a quiet news front will keep technical objectives in focus, with spillover from other grains and oilseed futures aiding the defensive tone, analysts added.

 

A technical analyst said market bulls are fading, technically, and don't want to see a bearish weekly low close Friday. However, no serious chart damage has yet occurred, he said. The next upside price objective is to push and close July prices above solid technical resistance at US$6.00. The next downside price objective is to push and close prices below solid support at this week's low of US$5.83.

 

First resistance for July corn is seen at US$5.96 3/4 and then at US$6.00. First support is seen at Thursday's low of US$5.85 3/4 and then at US$5.83.

 

The DTN Meteorlogix Weather Service forecast said episodes of showers and rain are on tap for the U.S. Midwest Friday through Sunday followed by fairly cool to cold weather next week. This isn't good drying weather, and field work and planting delays will likely continue, Meteorlogix reports. However, the area from central Illinois through Indiana and into Ohio has had little rainfall during the past 12-13 days.

 

In other news, Kentucky's soggy spring has put corn planting well behind schedule. Persistent rains turned spring planting into a series of starts and stops. Statewide, 11% of the intended corn acreage had been planted as of last Sunday, compared with 39% last year and a five-year average of 47%, according to the latest report from the National Agricultural Statistics Service's Kentucky field office.

 

Corn farmers in Kenya are switching to growing vegetables due to poor returns from corn and a delayed planting season, a cereal growers association representative said Friday.