May 1, 2009

 

CBOT Corn Outlook on Friday: Up 1-2 cents on continued planting delays

 

 

Chicago Board of Trade corn futures are expected to open slightly higher Friday following overnight gains as soggy U.S. corn belt weather continues to delay planting progress.

 

Corn is called 1 to 2 cents higher. In overnight trade, May corn, which is in delivery, was up 1/4 cent to US$3.96 1/2 per bushel, July corn was up 2 cents to US$4.05 1/2 and December corn was up 2 cents to US$4.25 1/4.

 

Weather is the dominant feature of the market, and remains bullish. Forecasts through next week call for consistent rain that will prevent fields from drying out and keep farmers from planting.

 

DTN Meteorlogix said in a forecast that while drier weather in the western and northern parts of the corn belt may allow for more planting, "it should still be awhile before fields dry out in the south and east Midwest regions."

 

Analysts said the crop is in the midst of its optimal time period for planting, but that it is starting to look like many areas won't be able to plant until mid-May at the earliest.

 

"I think we'll probably have a problem selling it off too aggressively with this weather forecast ahead of the weekend," said Marty Foreman, analyst for Doane Advisory Services.

 

Strong export demand is supporting the market, although a trader said it remains to be seen if the market can maintain that business even as prices hit US$4. The US$4 mark has provided resistance for weeks due to farmer selling at that level, traders said.

 

Traders said that fears about the swine flu and its impact have eased, although Mark Gold with Top Third Ag Marketing noted that it's still hitting the pork market, which could hurt feed demand later on.

 

In other news, there were 400 deliveries against the May contract.

 

Outside markets are not providing much direction Friday, analysts said. Traders note that volume was light overnight and should remain so Friday because of the May Day holiday, which has closed many markets around the world.

 

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 a bushel, a technical analyst said. The next downside price objective for the bears is to push and close prices below solid technical support at last week's and this week's low of US$3.70 a bushel.

 

First resistance for July corn is seen at Thursday's high of US$4.08 1/2 and then at US$4.14. First support is seen at US$4.00 and then at Thursday's low of US$3.96.