May 4, 2007

 

CBOT Corn Outlook on Friday: Up 1-2 cents on steady e-CBOT; planting concerns

 

 

Chicago Board of Trade corn futures are forecast to begin day time trading 1-to-2 cents higher Friday, benefiting from follow through from steady prices in the overnight session and continued concerns about the planting progress of the U.S. corn crop, a commission house analyst said.

 

In overnight electronic trading, May corn rose 1/4 cent to US$3.80 per bushel, July gained 3/4 cent to US$3.90 and December rose 1 3/4 cents to US$3.89. E-CBOT volume in July was 8,052 contracts.

 

The market should start higher on the steady tone in overnight activity as well as continued concerns about the level of corn planting in some areas of the U.S. Midwest, a commission house analyst said.

 

However, the rain forecast in the region looks to be not as widespread as earlier forecast and there are reports of active planting in parts of the U.S. Midwest which might temper buying enthusiasm, the analyst noted.

 

Corn could trade both sides of Thursday's settlement price, a floor trader said. There is a lot of concern that Monday's progress report will show the planting pace below average for this tine of year. However, corn has had a nice rally this week and the market could see some profit taking ahead of the weekend, the trader said.

 

In the western U.S. Midwest, scattered showers and thundershowers with amounts of .25-1.00 inch and locally heavier are forecast for Saturday and Sunday. On Monday, there is a chance for showers with amounts of .10-.50 inch possible with mainly dry weather forecast for Tuesday, DTN Meteorologix Weather said. Temperatures are expected to average near-to-above normal in the period.

 

In the eastern sections of the region, dry weather with only a few light showers are forecast during the weekend with temperatures near-to-above normal, Meteorologix Weather said. Mainly dry conditions with only a few light showers are expected Monday and Tuesday, with temperatures forecast above normal Monday and near-to-above normal Tuesday.

 

In the 6-to-10 day outlook, temperatures are expected to average near-to-above normal, with rainfall near-to-above normal northwest, near-to-below normal elsewhere in the region.

 

On daily technical charts, July corn gapped open higher on the daily bar chart and reached a five-week high on wet weather forecasts and fund buying, a technical analyst said.

 

First resistance for July is seen at US$3.93, then at US$3.96 1/2, Thursday's high and then at US$4.00. First support is seen at US$3.85 1/2 and then at US$3.80.

 

Deliveries posted against the May future were 1,267 contracts. Large issuers included the house account of Tenco which issued 351 contracts and the customer account of Fortis which issued 373 contracts. Large stoppers included the customer account of Man Professional Clearing, which stopped 360 contracts, and the customer account of Cunningham Commodities, which stopped 229 contracts. The last trade assigned was May 2.

 

In other corn news, Taiwan's corn imports are forecast to decline by 2%-to-3% in 2006-07 as hog production declines, according to a U.S. Department of Agricultural attach¨¦ report posted on the Foreign Agricultural Service Web site Thursday.

 

Corn futures trading in China remains closed due to the May Day holiday.