June 19, 2008
CBOT Corn Outlook on Thursday: Down 7-10 cents on drier weather
Chicago Board of Trade corn futures will likely open Thursday down 7-10 cents, under the same downward pressure that dominated overnight electronic trading, CBOT floor traders said.
Traders said a shift to drier summertime weather will likely dominate floor talk today.
"We kept trying to rally, but we couldn't hold the gains overnight," a trader said, citing weather as a likely cause.
The chance of rain can't be totally discounted through this weekend, but "any rains of real notoriety are confined to far southwestern parts of the region," according to Freese-Notis Weather. "Areas experiencing the worst river flooding in recent days will likely be the areas seeing the lightest rains through that period."
The private weather forecasting firm said the Corn Belt could experience more widespread rain pressure next around next Tuesday.
"Cool weather will be seen in especially eastern parts of the Midwest region over the next several days, with temperatures next week looking close to normal in the east and a bit above normal in the west," the firm said.
A higher dollar is also expected to act as a bearish force in Thursday's trading.
With acreage and stocks reports coming up at the month's end, the market won't back off too much, but if it has exhausted its upside potential, there will be some profit taking, a trader said.
The potential for Congress to tinker with curtailing pension-fund investments in commodity index funds or revise refined fuel legislation is also keeping the corn market jittery, the trader added.
"Corn bulls have the solid near-term technical advantage," a technical analyst said, noting he still sees an upside to the corn market, but expects a "corrective pullback in prices soon."
Weekly export sales reported by the USDA totaled 343,000 metric tonnes for cold corn and 225,000 for new crop.
"Demand rationing has kept the spreads (between the July and December contracts) wide," a trader said.
