May 25, 2007

 

CBOT Corn Outlook on Friday: Up 2-3 cents on weather concerns, firm e-CBOT

 

 

Chicago Board of Trade corn futures are predicted to start day-session trading 2 to 3 cents higher Friday as continued concerns about dry conditions in the eastern U.S. Midwest and firm prices in overnight trading are expected to support prices ahead of the long weekend, with the exchange closed Monday for Memorial Day, analysts said.

 

In overnight electronic trading, July corn rose 3 1/4 cents to US$3.79 3/4 per bushel, September gained 3 1/2 cents to US$3.80 1/4 and December also rose 3 1/2 cents to US$3.76 1/4. E-CBOT volume in July was 6,639 contracts.

 

The crop in the eastern U.S. Midwest needs rain and until it receives some the market will remain on edge, a commission house analyst said. There is some rain in the forecast for that region, but until it does people are not going to hold short positions, the analyst added.

 

Participants will even up their positions ahead of the holiday weekend and will be looking for the midday weather forecasts for direction, a floor analyst said. Tuesday could be a big day for market direction, the floor analyst said.

 

In the western U.S. Midwest there is a chance for scattered showers and thundershowers Saturday, which may linger in the south on Sunday, DTN Meteorologix Weather said. Rainfall should average 0.10-0.50 in the region and locally heavier. Amounts in southeastern Iowa should average 0.25-1.00 inch. Scattered showers are possible Monday and Tuesday. Temperatures during the weekend are expected to average below normal, with near-normal readings on Monday.

 

In the eastern U.S. Midwest, scattered showers are possible during the weekend, with dry weather or only a few light showers Monday, Meteorologix Weather said. Rainfall should average 0.25-0.75 inch in northern and central areas and 0.10-0.50 inch in southern sections. Temperatures are expected to average near- to below-normal in the northwest and above normal in the south Saturday and below normal in the north and above normal in the south Sunday.

 

In the six- to 10-day outlook, temperatures are expected to average below normal, while rainfall should average near- to below-normal from Illinois westward and near- to above-normal further east, Meteorologix Weather said.

 

On daily technical charts July closed near the session high Thursday in choppy trade, with trading expected to be lighter Friday ahead of the holiday weekend, a technical analyst said. Market bulls would regain upside technical momentum by pushing prices above solid chart resistance at this week's high of US$3.82 1/4, while the next downside objective for bears is pushing prices below support at US$3.67 1/4.

 

First resistance for July is seen at US$3.78 1/4, and then at US$3.80. First support is seen at US$3.70 1/2 and then at US$3.67 1/2.

 

In other corn news, China exported 579,000 metric tonnes of corn in April and 3.480 million tonnes in January-April 2007, up 55.9% from the previous year, China's General Administration of Customs reported Friday.

 

Corn futures on China's Dalian Commodities Exchange settled lower, with the benchmark September contract down RMB4 at RMB1,671 per metric tonne.

 

Friday afternoon the Commodity Futures Trading Commission is scheduled to release the commitment of traders report for the period ending May 22.

 

Monday, the Chicago Board of Trade will be closed in observance of Memorial Day.