July 13, 2007

 

CBOT Corn Outlook on Friday: Steady-2 cents lower, choppy trade expected

 

 

Chicago Board of Trade corn futures are predicted to begin trading steady to 2 cents lower Friday following weaker prices overnight and the lack of fresh news, with weather expected to remain the feature, analysts said.

 

In overnight electronic trading, July corn declined 2 1/4 cents to US$3.41 3/4 per bushel, September slipped 1 1/2 cents to US$3.50 and December edged down 3/4 cent to US$3.64 1/2. E-CBOT volume in December was 8,820 contracts.

 

Corn should trade both sides of Thursday's settlement prices as "it's all about the weather," an analyst said. The market will wait on the midday weather forecasts, which will determine the direction of the market, he added.

 

Corn is in a weather market, a commission house analyst said. If the market was trading fundamentals it would have been lower Thursday. The crop is beginning its key reproductive stage of pollination and the longer-term forecasts continue to predict hot and dry weather for much of the U.S. Midwest late next week, which will limit the downside. Until those forecasts change, it will be hard for corn to trade much lower, he said.

 

In the western U.S. Midwest a few light showers are possible Saturday with dry weather expected Sunday with only a few light showers possible again Monday, DTN Meteorologix Weather said. Temperatures will average below normal during the weekend.

 

In the eastern U.S. Midwest there is a chance for a few showers and isolated thundershowers Saturday into early Sunday with amounts averaging a trace to 0.50-inch with most shower activity in south and eastern areas, Meteorologix Weather said. Temperatures will average below normal during the weekend.

 

In the six to 10-day outlook, temperatures are expected to average above normal and rainfall is predicted near to below normal.

 

On daily technical charts, December corn closed nearer the session high and hit a two-week high as a bullish weather forecast supported the market, a technical analyst said.

 

The bulls' next upside price objective remains closing prices above solid resistance at US$3.75 per bushel, with the bears' downside price objective closing prices below US$3.50.

 

First resistance is seen at US$3.65 1/2, Thursday's high, and then at US$3.70. First support is seen at US$3.60, and then at US$3.56.

 

Deliveries posted against the Chicago Board of Trade July corn future were 399 contracts Friday. Large issuers included the customer account of Rand Financial, which issued 300 contracts and the customer account of Man Financial, which issued 89 contracts. Large stoppers included the customer account of JP Morgan, which stopped 352 contracts and the customer account of Rand Financial, which stopped 47 contracts. The last trade date assigned was July 11.

 

South Korea is seeking to purchase 110,000 metric tonnes of optional origin corn, analysts said.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled higher, with the benchmark January contract up RMB/7 at RMB1,503 per metric tonne.