June 16, 2006

 

CBOT Corn Outlook on Friday: Up 2-3 cents on outside markets, weather

 

 

Corn futures at the Chicago Board of Trade are predicted to begin open auction trading 2-3 cents higher Friday as higher prices in overnight trade, firm outside markets and concerns about the near term weather are expected to support prices, sources said.

 

In overnight e-CBOT trading, July corn rose 2 3/4 cents to US$2.35 3/4 per bushel and December gained 3 cents to US$2.61 1/2.

 

The weather forecast is calling for hot temperatures and scattered rains and but the market looks to consolidate ahead of the weekend after the recent price weakness, a floor analyst said.

 

There are perceived worries about the weather and because of this, people will want to even up positions ahead of the weekend, a commission house analyst said.

 

This is the time of the year when the weather is the dominant feature, hot weather is forecast and the market is acknowledging it, he added.

 

July corn has declined 14 1/2 cents since Monday's settlement.

 

In the western U.S. Midwest, scattered showers and thunderstorms are forecast to develop in the west and north Friday and spread southeast on Saturday, DTN Meteorologix Weather said, with dry weather returning Sunday and Monday. Temperatures are expected to average-above normal Friday, near-to-above normal Saturday and near-to-below normal Sunday.

 

In the eastern U.S. Midwest, scattered to widely scattered thundershowers are predicted Saturday night into Sunday, with rainfall averaging .10-.75 inch and locally heavier, DTN Meteorologix Weather said. Temperatures are expected to average-above normal Saturday, but not as warm Sunday, DTN Meteorologix Weather said.

 

Cash corn basis bids were unchanged to higher with Central Illinois up 6 cents at 2 cents under the July.

 

On technical charts, July corn reached a fresh 11-week low with the next downside price objective closing prices below chart support at the March low of US$2.27 3/4, a technical analyst said. It will take a close above this week's high of US$2.51 1/4 to provide the bulls with fresh upside technical momentum, he added. First resistance for July corn is seen at US$2.35 1/2 and then at Thursday's high of US$2.38 3/4. First support is pegged at US$2.32, and then at US$2.30.

 

In other corn news, the Pusan branch of the Korean Feed Association, or KFA bought 55,000 metric tonnes of optional-origin corn from Mitsubishi Thursday, a trader in Seoul said Friday.

 

Corn futures on China's Dalian Commodities Exchange settled near unchanged with the March contract up RMB1 to RMB1,476/tonne.

 

Friday afternoon the Commodity Futures Trading Commission is scheduled to release the commitment of traders report as of June 13 after the close.