May 2, 2008

 

CBOT Corn Outlook on Friday: Down 2-4 cents on profit-taking

 

 

Chicago Board of Trade corn futures are expected to open 2 to 4 cents lower Friday, with some potential early profit-taking ahead of the weekend and otherwise mixed indicators.

 

Overnight, May corn was down 2 3/4 cents to US$6.02 3/4, July was down 4 1/4 cents to US$6.13 and December was down 5 cents to US$6.26 1/2 a bushel.

 

The U.S. dollar is stronger against the world's major currencies, which is expected to exert pressure on the grain markets. Other key markets, such as crude oil and precious metals, are higher, however, which may be a supportive influence for corn.

 

Weather remains key, and forecasts remain much like they have in recent weeks - plenty of rain in the Midwest, with brief windows of opportunity for corn growers.

 

"They're still going to have to plant between the shower systems," said Shawn McCambridge, senior grains analyst at Prudential-Bache.

 

He said nervous long positions will look to take profits ahead of the weekend, but that continued rain, including storms forecast Friday afternoon in the Midwest, will provide price support.

 

"I wouldn't be surprised to see trading on both sides and for the market to recover as we absorb early selling," McCambridge said.

 

He and floor traders said there wasn't much other significant news for the corn market early Friday.

 

A couple of floor traders said they are following the strike situation among farmers in Argentina, but said it is unclear how the situation will be resolved. One report says farmers are set to resume their strike after a 30-day truce expires Friday.

 

The traders also said that unlike many recent Fridays, they expected minimal profit-taking Friday.

 

"The weather's not bearish enough to sell over the weekend," one trader said.

 

DTN Meteorlogix is forecasting between 0.3 and 1.5 inches of rain across the Midwest this weekend, with the Upper Midwest getting hit especially hard. The Delta and Ohio Valley will also see more rain. The forecast says even with some opportunities in other parts of the Midwest, there "is very little chance that corn planting will be much more than 30% complete by Sunday."

 

The weather pattern for next week is unsettled, with chances for more rain in the corn belt, according to the forecast.

 

In other news, firms issued 229 deliveries against the May corn contract, with Man Professional Clearing the largest stopper of 174 lots. MF Global stopped 65, while other stoppers were light and scattered.