July 14, 2006

  

CBOT Corn Outlook on Friday: Down 1-2 cents, following overnight trade

 

 

Corn futures are predicted to begin open-auction trading 1-2 cents lower Friday morning following the tone set in overnight activity and on rainfall overnight in parts of the U.S. Midwest, sources said. However, above-average to much-above-average temperatures forecast for much of the region over the next several days is expected to provide underlying support, the sources added.

 

In overnight e-CBOT trading, July corn declined 3 3/4 cents to US$2.48 3/4 per bushel and December slipped 2 1/2 cents to US$2.73 1/2.

 

The market should start out lower and then it should be a choppy two-sided session, a commission house analyst said. There was some rain overnight, but hot weather is forecast for the next several days which should give the market some support. The midday forecasts will by a key and the market will be watching for any interest from the funds, he added.

 

It is Friday and the forecast is for hot weather, so many people will not be interested in holding a position over the weekend, a floor trader said. The market was lower overnight, but there is a lot of uncertainty about the weather, he added.

 

In the western U.S. Midwest, above to much-above normal temperatures are forecast over the next five days in the region with mainly dry conditions, DTN Meteorologix Weather said. Average high temperatures are predicted between 95 degrees and 102 degrees Fahrenheit.

 

In the 6-to-10 day outlook, temperatures are expected to average above normal and precipitation near to above normal in the north and below normal south, DTN Meteorologix Weather said.

 

In the eastern U.S. Midwest, mainly dry conditions are forecast for the weekend, with temperatures averaging above to much-above normal for the weekend, DTN Meteorologix Weather said. Early next week temperatures average above to well above normal on Monday and Tuesday with dry conditions or only a few light showers near the Great Lakes in the period.

 

In the 6-to-10 day outlook, temperatures are forecast to average above to much-above normal early in the period, near to below normal later. Rainfall is expected near to below normal west and near to above normal east, DTN Meteorologix Weather said.

 

Deliveries posted against the Chicago Board of Trade July corn contract Friday were 585 contracts. The customer account of Dowd Wescott issued 308 contracts. The customer account of Bank of America stopped 168 contracts and the house account of Tenco stopped 108 contracts. Preliminary open interest in July is 1,051 contracts as of Thursday, July 13.

 

Cash corn basis bids were mixed Friday morning. Central Illinois was 2 cents lower at 7 cents under the September future.

 

On technical charts, no serious chart damage occurred Thursday, with Thursday's trade typical during a weather market, a market technician said. First resistance for December corn is seen at US$2.78 and then at US$2.81. First support is pegged at US$2.75 and then at US$2.72. In other corn news, corn futures on China's Dalian Commodities exchange settled mostly lower, with March down RMB7 at RMB1,419/tonne.

 

Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the latest commitment of traders report.