May 5, 2006

 

CBOT Corn Outlook on Friday: 1-2 cents higher on outside markets, wheat

 

 

Corn futures at the Chicago Board of Trade are expected to begin open auction trading 1-2 cents higher Friday as a rebound in outside markets, spillover support from stronger wheat futures and firm prices in overnight trade are expected to provide support for the market, floor sources said.

 

In overnight e-CBOT trading, July corn rose 2 cents to US$2.41 1/4 per bushel and December corn gained 2 1/4 cents to US$2.64 3/4.

 

The outside markets are higher, and corn should see some spillover strength from wheat futures which were higher overnight on the results from the hard red winter wheat tour, a floor analyst said.

 

Position squaring after recent price weakness should also be supportive, though the weekend weather is conducive for planting, a floor trader said. Floor sources expect planting to be 70%-75% complete as of Sunday.

 

Mainly dry weather is forecast in the western U.S. Midwest, DTN Meteorologix Weather said, with only a few light showers in the far southern areas. Light or locally moderate showers are possible Monday.

 

In the eastern U.S. Midwest, mainly dry weather is forecast from Friday through Sunday before light to moderate showers and possible thundershowers on Monday and Tuesday, DTN Meteorologix Weather said.

 

Deliveries posted against the May contract totaled 2,673 contracts. Issuers included the customer account of Dowd Wescott Group, which issued 425 contracts, the customer account of Man Financial, which issued 474 contracts, and the customer account of Fimat USA, which issued 255 contracts.

 

Stoppers included the customer account of Man Financial, which stopped 544 contracts, the Dowd Westcott Group, which stopped 446 contracts, and the customer account of Dorman Trading, which stopped 290 contracts.

 

On technical charts, it will take a close back above US$2.50 to provide bulls with fresh technical momentum in July corn, a technical analyst said. First resistance is pegged at US$2.42 and then at US$2.43 3/4, Thursday's high. First support is seen at US$2.38 3/4, Thursday's low, and then at US$2.36.

 

In other news, the U.S. Department of Agriculture is optimistic over the possibility of China becoming a substantial importer of U.S. corn this year, Foreign Agricultural Service Administrator Mike Yost said Thursday in a report on the USDA's Web site.