May 18, 2007

 

CBOT Corn Outlook on Friday: Up 3-5 cents, following overnight trend

 

 

Chicago Board of Trade corn futures are seen starting Friday's day session on firm footing, taking its cue from overnight trade, with analysts expecting end-of-week positioning to be a feature.

 

Analysts expect corn to open 3 to 5 cents higher.

 

In overnight electronic trading, July corn was 5 cents higher at US$3.78, and December corn was 2 3/4 cents higher at US$3.73 1/4.

 

A quiet news front will keep technical factors and weather in focus with traders looking to reduce some risks heading into the weekend, analysts said.

 

Traders are said to be looking ahead to next week's crop progress and weather outlooks. Meanwhile, old/new crop spreading seen as a feature, with tightening old crop inventories and generally favorable weather for new crops widening the inverse in spreads, analysts added.

 

Otherwise, the market has little fresh direction aside from higher outside markets, and that should hold corn within its recent trading ranges, a CBOT floor trader said.

 

A market technician said the corn market still looks to hold in a trading range between the May low of US$3.54 and the May high of US$3.96 1/2 for the near term basis the July contract. The next downside price objective is closing prices below solid support at US$3.61 a bushel. The market would regain fresh upside technical momentum by pushing prices above solid chart resistance at US$3.80.

 

First resistance for July corn is seen at US$3.75 and then at Thursday's high of US$3.78 3/4. First support is seen at Thursday's low of US$3.71 and then at US$3.68.

 

The DTN Meteorlogix Weather Service forecast said mainly dry conditions are on tap for the western Midwest Friday and Saturday. Dry conditions or with only a few light showers in the northern areas are seen for Sunday. Temperatures will average near to above normal Friday, above normal Saturday, and near normal in northern areas and above normal in southern areas Sunday. Only a few late afternoon showers are possible Monday.

 

In the eastern Midwest, mainly dry weather is seen for Friday and Saturday. Dry conditions with possibly only a few light showers in northern areas are forecasted for Sunday. Temperatures will average below normal Friday, near to above normal in western areas and below normal in eastern areas Saturday and Sunday. A dry outlook is seen for Monday and Tuesday, Meteorlogix reports.

 

In overseas markets, corn futures traded on the Dalian Commodity Exchange settled lower, with the benchmark September 2007 contract settling down RMB4 at RMB1,677/tonne.