July 21, 2006

CBOT Corn Outlook on Friday: 2-3 cents lower on mild weather forecasts

Corn futures at the Chicago Board of Trade are predicted to begin open auction trading 2-3 cents lower Friday, floor sources said.

Mild temperatures and rain seen through late next week are expected to weigh on the market, as well as unexpected overnight rains in Kansas and Iowa, said an analyst. Follow-through speculative selling from Thursday is expected to continue on the favorable forecast, he noted.

In overnight e-CBOT trading, September corn fell 2 1/2 cents to US$2.40 per bushel and December ended 3 cents lower at US$2.56 1/4.

On technical charts, the next major near-term downside price objective for December futures is the June low of US$2.47 3/4, technical analysts said. The next upside price objective is closing prices above solid chart resistance at Tuesday's high of US$2.68 1/2. First resistance for December corn is seen at US$2.60 and then at US$2.62 1/2. First support is seen at US$2.57 1/4 - Thursday's low - and then at US$2.54 3/4.

Near-term weather conditions were unchanged from prior forecasts of scattered rains and temperatures in the low 80s in the Midwest, staying mild until late next week, an analyst noted.

In the western U.S. Midwest, weather is expected to be mainly dry during the weekend with temperatures near to below normal Saturday and near to above normal Sunday, DTN Meteorologix Weather said. Temperatures are expected to average near to above normal through the middle of next week with a chance of widely scattered light showers.

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

In the eastern U.S. Midwest, the weekend is expected to be dry with temperatures near to below normal, Meteorologix Weather said. Early next week, forecasts show dry weather with temperatures near to above normal.

In the 6-10 day outlook temperatures are expected to average near to above normal with near to above normal rainfall through southern and eastern regions, and near to below normal precipitation in the northwest, DTN Meteorologix Weather said.

In overseas trade, corn futures settled lower on China's Dalian Commodity Exchange Friday. The most widely held March 2007 contract settled at RMB1,403/tonne, down RMB20.