May 8, 2009

 

CBOT Corn Outlook on Friday: Up 2-4 cents on wet weather, slow planting

 

 

Chicago Board of Trade corn futures are expected to open 2 cents to 4 cents higher Friday following overnight gains amid support from continued concerns about planting delays.

 

In overnight trading, July corn was up 3 1/2 cents to US$4.15 1/2 per bushel and December corn was up 3 3/4 cents to US$4.34 3/4.

 

Weather is the key feature of the market as farmers in the eastern corn belt look for an opportunity to get the crop planted.

 

"It's still the same fundamentals of showers moving across the Midwest and delaying planting, although some planting has gotten planted this week, particularly in the western corn belt," said Shawn McCambridge, senior grains analyst with Prudential Bache.

 

McCambridge and others expect Monday's crop progress report from the USDA to show the crop still well behind the average planted pace.

 

More rainfall is expected into next week, particularly in the southern and eastern corn belt, analysts note.

 

Outside markets appear to be supportive, a floor trader said, with support from crude oil and equities. He said a jobs report out Friday was not as bad as some had feared.

 

McCambridge said that traders could be cautious and take profits ahead of the weekend because of the chance for the weather forecast to change by Monday.

 

The trade is beginning to look ahead to next week's supply and demand report from the U.S. Department of Agriculture. Analysts are mostly expecting only a slight change in ending stocks for 2008-09, but say that the projected carryout for 2009-10 is likely to be lower.

 

The report is scheduled to be released Tuesday at 8:30 a.m., EDT.

 

Traders are also awaiting an expected report from a private analytical firm Friday morning on planted acres this season.

 

Bulls have the near-term technical advantage, a technical analyst said. The next upside price objective is to push and close July prices above solid technical resistance at Thursday's high of US$4.20 a bushel.

 

A floor trader said he expects the market to trade within Thursday's range on Friday, but that "if we can manage to close above US$4.20 in the July contract we'd look awfully good on the charts going home.

 

The next downside price objective for the bears is to push and close prices below solid technical support at this week's low of US$3.96 1/2 a bushel, the technical analyst said.

 

First resistance for July corn is seen at US$4.17 1/2 and then at US$4.20. First support is seen at Thursday's low of US$4.06 1/4 and then at US$4.00.