May 26, 2006

 

CBOT Corn Outlook on Friday: Seen 2-3 cents higher ahead of long weekend

 

 

Corn futures at the Chicago Board of Trade are expected to begin open auction trading 2-3 cents higher Friday as participants position themselves ahead of the long weekend.

 

The CBOT will be closed Monday in observance of Memorial Day.

 

In overnight e-CBOT trading, July corn rose 2 1/2 cents to US$2.55 3/4 per bushel and December added on 3 cents to US$2.81.

 

Corn is facing a three-day weekend and the market should be adding some risk premium ahead of it, said Don Roose, president of US Commodities in West Des Moines, Iowa.

 

The U.S. needs to produce a big crop and the forecasts are calling for temperatures to be warmer than normal, he added.

 

In addition, some of the outside markets are firm and that is supportive as well, he noted.

 

A floor trader noted that the recent news that China would import genetically-modified corn from the U.S. was also positive long-term.

 

People will not want to be short over the weekend and corn should trade higher as a result, a floor analyst said.

 

In the western U.S. Midwest, there is a chance for a few thunderstorms to develop Saturday, with mainly dry conditions on Sunday, DTN Meteorologix Weather said. Temperatures during the weekend should be in the upper 80s to low 90's degrees Fahrenheit.

 

In the eastern U.S. Midwest, there is a chance for a few thundershowers over the weekend but with low coverage, DTN Meteorologix Weather said. Temperatures are forecast to average above normal over the weekend, with the highest temperatures ranging from the 80s to low 90s F.

 

On technical charts, market bulls will need to fill last week's downside price gap on the daily chart-above US$2.59 1/2 to regain better upside technical momentum, a technical analyst said. First resistance for July corn is seen at US$2.53 3/4, and then at US$2.55. First support is seen at US$2.50 and then at US$2.48, this week's low.

 

In other corn news, strong buying boosted corn futures prices on China's Dalian Commodities Exchange. The March contract gained RMB/22 to RMB 1,535/tonne, after reaching a new all-time high earlier in the session.

 

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